CNN Business/Matt Egan
‘It’s going to be really ugly.’ Here come the big bank earnings
“Mass unemployment. Surging bankruptcies. An unprecedented health crisis. And near-zero interest rates. It’s a depressing time for America’s banks — and Wall Street is bracing for huge profit plunges when they report results this week.
JPMorgan Chase (JPM), Bank of America and Citigroup (C) are all expected to reveal their second-quarter profits crashed by 50% or more. Wells Fargo (WFC) is likely to slash its coveted dividend and announce the scandal-ridden bank’s first quarterly loss since the financial crisis.
“2020 has been a disaster,” said Jim Shanahan, who covers banks at Edward Jones. “It wasn’t the banks’ fault. It was like we had an alien invasion in the second quarter.”
The biggest driver of shrinking profits — or outright losses, in Wells Fargo’s case — is the fact that banks are preparing to deal with a pile of toxic loans caused by the pandemic.”
Biden’s Tax Plan Could Cut S&P 500 Earnings By 12%, Goldman Sachs Warns
“If he’s elected in November, Democratic candidate Joe Biden’s tax policies could have a major negative impact on earnings for companies in the S&P 500, according to Goldman Sachs analysts.
Goldman’s researchers, led by David Kostin, expect Biden’s tax plan to reduce their S&P earnings estimates by 12%, from $170 per share to $150 per share.
That estimate is based on several likely Biden policies including raising the statutory federal tax rate on domestic income by 7%, doubling the tax rate on certain foreign income, imposing a minimum tax rate of 15%, and creating an additional payroll tax on high earners.
The researchers also expect Biden’s tax policy to create a drag on earnings that’s comparable to the boost companies saw after the 2017 Tax Cuts and Jobs Act (and the corporate tax benefits that came with it).”
Los Angeles Times/Associated Press
Stocks slam into reverse as California dials back reopening
“Wall Street got a painful reminder of the threat the coronavirus pandemic poses to the economy Monday, and a big early gain for stocks suddenly flipped to losses after California rolled back its reopening plans amid a spike in cases.
The Standard & Poor’s 500 index fell 0.9%, with all the losses accumulating in the last hour of trading, after California said it will extend closures of bars and indoor dining across the state, among other restrictions. It’s one of many states across the U.S. West and South where coronavirus counts are accelerating and threatening the budding recovery that just got underway for the economy.
The announcement from California, which accounts for nearly 15% of the country’s economy, combined with an escalation by the White House in its tensions with China to knock the market down from its earlier gain of 1.6%.”
Marketwatch/Myra P. Saefong
Why silver is trading at a nearly 4-year high
“Silver futures on Monday marked their highest settlement in nearly four years, buoyed by a sharp climb in investment demand as the metal continues to play catch up to gains by sister metal gold.
“Trading in the gray metal is worth barely 10% of what gold sees each day, so hedge funds and other money managers wanting to catch up with the yellow metal’s jump towards new all-time highs might expect to get more bang for their buck in silver,” said Adrian Ash, director of research at BullionVault.
The September silver contract SIU20, -1.71% rose 73 cents, or 3.9%, to settle at $19.788 an ounce Monday. That was the highest finish for a most-active contract since September 2016, according to Dow Jones Market Data. Gold on Monday, meanwhile, saw its August contract GCQ20, -0.77% settle at $1,814.10 an ounce, close to the $1,820.60 it settled at on July 8, which was the highest since September 2011.
There has been a historically high purchase of physical silver via silver exchange-traded funds in the past few months alone, said Peter Spina, president and chief executive officer at GoldSeek.com. “Never in the history of silver have we seen such demand for [the metal] in such a short period of time.””