What’s News in Markets: Banking Boom, Macy’s Troubles, Drugmakers Slide
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Access to affordable credit helps me pay my employees, but I don't really need it. Inflation is killing me. But who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill. See? Banks and credit unions help small businesses make payroll. This bill would cut the vital resources they need. While increasing megastore profits. They deserve it, don't they? Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition.
Hey, listeners. It's Saturday, January 18th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Welcome back, everybody, and apologies in advance for any hoarseness on my part. I'm getting over being under the weather thanks to the frigid temperatures we've been having here in New York. And yes, I had a cold, but stocks were red hot this week, mostly. On Wednesday, the Dow, S&P 500, and Nasdaq all had their best trading day since the big post-election rally back in November, thanks to new inflation data that's been stoking optimism for rate cuts and big banks setting a strong tone for earnings season.
More on that in a second. But in came the cold on Thursday. All three indexes ended lower, weighed down by declines in tech stocks. But on Friday, stocks warmed right back up and the major indexes notched their best week since that post-election rally. On a weekly basis, the Dow gained 3.7%, the S&P 500 added 2.9%, and the Nasdaq rose 2.5%.
Let's circle back to those big banks, which posted surging quarterly profits on Wednesday thanks to a rebound on Wall Street. JPMorgan Chase said its net income rose 50%, while Goldman Sachs said its net income more than doubled, and Citigroup swung to a profit. We got similar readings from other big players this week, too, like Wells Fargo, Morgan Stanley, and Bank of America. Why the totally gangbusters numbers? Because, for one, banks are seeing this optimism from their corporate clients about the economy and the incoming Trump administration, which is spurring a big return to dealmaking, fundraising, and trading. So how'd the stocks do? Well, Goldman, Wells Fargo, and Citi saw their stocks each close at least 6% higher on Wednesday, with Goldman ranking among the top performers in the Dow.
And on the week, Goldman gained nearly 12%, Wells Fargo rose more than 10%, and Citi added 12%. Not all retailers had a holly jolly holiday season in 2024.
What set the stage for this week’s market moves and opening overview?
Now, that's not to say shoppers weren't busy. They were, and I have data to prove it. During November and December, core retail sales increased 4% from 2023, per the Commerce Department. But some companies didn't get as much demand as they expected. For instance, Macy's. So on Monday, the department store chain warned of weaker holiday sales, despite the company's recent efforts to boost revenue and turn the company around. Macy's shares tumbled 8.1% Monday and on a weekly basis lost more than 11%. Meanwhile, Target had good holiday sales, but you wouldn't know that from its stock move on Thursday. After years of sluggish sales, the big-box giant reported better-than-expected sales in the all-important holiday period.
But even so, Target shares slipped 1% Thursday and, on a weekly basis, fell 5.7%. Last but not least, it wasn't just me who was under the weather this week. So were some of the big names in drugmaker stocks. Now let's start with Moderna, whose shares took a nosedive after its latest earnings report. Notably, the biotech company's 2025 revenue guidance missed Wall Street's expectations. And Moderna really slashed this forecast. Before, the company had predicted full-year revenue of up to $3.5 billion. Now it predicts $1.5 to $2.5 billion, as sales of its COVID and RSV vaccines remain sluggish. Shares plunged 17% on Monday, and on a weekly basis, the stock lost 19%. Then there was Eli Lilly, which on Tuesday warned that sales of its popular diabetes and anti-obesity drugs, Mount Jaro and Zetbound, were growing slower than anticipated, citing the lower-than-expected inventory of the drugs.
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Chapters
3 chaptersSpeakers
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