Wall Street falls after weak start to earnings season
The US stock market is down after a disappointing earnings report form Citigroup.
Wall Street has fallen after a disappointing start to banking earnings season. The US stock market has fallen by almost 90 points.
Bad news from banks and utilities sink stocks
The US stock market fell after a worse-than-expected fourth-quarter (Q4) earnings report from Citigroup, The company has less revenue than expected after the volatility of Wall Street in December 2018. The missed revenue estimates could predict an unsatisfactory series of reports from other banks.
Shares also fell after distressing news from Pacific Gas & Electirc Company that the company may file for bankruptcy . The corporation has been under siege for its mismanagement during the California wildfires. The utility company’s chief executive officer (CEO), Geisha Williams, also resigned, further throwing PG &E into chaos.
What could earnings season mean for Wall Street?
The start to earnings season for 2019 could result in sluggish reports of lower revenue, according to Kate Warne, investment strategist at Edward Jones.
‘More important for what's likely to drive the market is what companies say about what they are seeing now and what their expectations are for 2019.One of the big concerns for investors has been how much earnings growth will slow. Expectations for fourth-quarter earnings have come down a lot over the last month or two. So, the reassurance or worry is going to be if companies lower guidance and say 2019 looks to be a challenging year than it's already baked in,’ said Warne.
Another financial expert, Brian Reynolds, analyst at Canaccord Genuity, noted that lower earnings in addition to a trade stalemate with China are driving the US stock market down.
'Those worries, especially trade concerns, are likely to produce an earnings season that is softer than the norm for this bull market, according to our analysis; while most companies are likely going to beat their estimates, a below-normal amount of them are likely to do so,' wrote Reynolds.
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