Earnings Previews: Bank of America, BNY Mellon, Charles Schwab

The three major U.S. equity indexes closed slightly lower on Wednesday. The Dow Jones industrials ended the day down 0.1%%, the S&P 500 closed 0.33% lower and the Nasdaq retreated 0.09%. Seven of 11 sectors closed lower, with utilities (3.42%) and real estate (1.39%) posting the biggest losses. Energy and consumer staples posted the best gains, 0.75% and 0.48%, respectively.

The minutes of the Federal Reserve’s Federal Open Market Committee meeting were released in the afternoon and did not contain any surprises. The morning’s producer price index came in higher than expected, indicating that inflation continues among wholesalers.

Thursday’s consumer price index (CPI) report for September also came in higher than expected, up 0.4% month over month. Inflation’s 12-month pace is up to 8.2%, above economists’ consensus of 8.1%. New claims for jobless benefits are forecast to rise slightly to 225,000.

UBS raised its rating on Norwegian Cruise Lines from Neutral to Buy on Wednesday, giving the company and its rivals, Carnival and Royal Caribbean, a double-digit share price boost.

All three major indexes were trading higher until the CPI report was released. They were trading lower at Thursday’s opening bell.

Before markets opened, BlackRock reported results that beat both top-line and bottom-line estimates. The asset management firm reported net inflows of $248 billion for the first nine months of 2022. The stock was trading down by about 3% Thursday.

Delta Air Lines missed the consensus earnings per share (EPS) estimate but did beat on revenue. Sales were up nearly 53% year over year. Guidance for the fourth quarter was in line with estimates, and the airline said that it is on track to hit fiscal 2024 targets of $7.00 in adjusted EPS and $4 billion in free cash flow. Shares traded up about 1.9% early Thursday.

Taiwan Semiconductor Manufacturing posted EPS about 4% above estimates and a revenue jump of 48%. TSMC raised fourth-quarter revenue guidance but lowered its capex budget by 10% to $36 billion. The company also said it received a one-year exemption from the new U.S. law prohibiting sales of advanced chips to China. The stock traded down about 0.3% Thursday.

Walgreens beat estimates on both the top and bottom lines. For fiscal 2023 (which ends next August), the company forecast EPS in line with estimates and core business growth of 8% to 10%. That number is hobbled by the strong dollar and an expected headwind of negative 15% to 17% from a lower volume of COVID-19 vaccinations. Shares traded up 1.6% Thursday morning.

Here are our previews of four big banks and one Dow health care provider that will be reporting quarterly results first thing Friday morning: Citigroup, JPMorgan, Morgan Stanley, UnitedHealth and Wells Fargo.

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