US banks surge after stress test results

- Banks lead Wall Street higher thanks to good performance in Fed stress tests
- S&P (US500) bounced off the 23.6% Fibo level
- Apple (AAPL.US) to manufacture new Mac Pro in China

Major stock market indices from Wall Street are trading higher on the final trading session of the second quarter. Banks are among the best performing US stocks thanks to passing Fed stress tests and raising payouts. Meanwhile, Wall Street Journal reported that Apple will shift manufacturing of new Mac Pro to China.

S&P 500 (US500) tries to recoup recent weakness. As one can see the index halted decline on the 23.6% Fibo level of the latest upward movement and has slowly climbed higher since. The swing level at 2960 pts is the closest resistance level to watch while the aforementioned Fibo level (2912 pts) should be the first goal for the bears. Keep in mind that the direction in which the US stock market will head is likely to be to a huge extent determined by tomorrow’s Trump-Xi meeting. Source: xStation5

US banks increase payouts after passing Fed stress tests

The Federal Reserve released results of its annual stress test that showed all 18 lenders surviving harsh market and liquidity conditions. Due to good performance in test led, Fed gave banks green light to increased payouts. Following the release, the bulk of the major US banks announced their dividend and buyback decisions. Analysts’ expected that 12 of the US biggest banks will distribute as much as $150 billion to shareholders in the form of dividends or share repurchases. However, it turns out that the group will share as much $173 billion with shareholders. For instance, Goldman Sachs (GS.US) announced that it will increase the quarterly dividend from $0.85 to $1.25 while JP Morgan (JPM.US) will increase quarterly payout to $0.90 from $0.80. Banks are the best performing group of stocks in the first hours of the US session.

Major US banks lead S&P 500 (US500) index higher on Friday. Source: Bloomberg

Other company news

According to the Wall Street Journal, Apple (AAPL.US) hired Quanta Computer, a Taiwan-based electronics manufacturer, to manufacture its new Mac Pro. Mac Pro was the only major device of Apple to be assembled in the United States. In case the information is confirmed Apple’s reliance on China will increase even further and such a move looks a bit puzzling in the midst of the US-China trade war.

Constellation Brands (STZ.US) is the best performing S&P 500 (US500) stock at the beginning of Friday’s session. The company reported earnings for the fiscal Q1 2020 (ended 31 May 2019) before the session open. The beverage company generated higher-than-expected revenue of $2.097 billion (expected $2.065 billion). Net income of $429.8 million was 6.74% above analysts’ median estimate. The company raised guidance for the full fiscal 2020 by 15 cents, to $8.65-8.95 range.

JP Morgan (JPM.US) opened significantly higher on Friday as sentiment towards the US banking sector was boosted by good performance in annual Fed stress tests. The stock failed to break above the resistance zone ranging $111.50-112.50 in the first hour of today’s trading and pulled back to the vicinity of the 50-session moving average (green line). Note that the stock price is stuck in between two important price zones and direction of a break from the range may define near-term outlook. Source: xStation5

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