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PORTFOLIO MANAGER COMMENTARY
Stocks rose Friday as investors digested bank earnings and bet inflation would ease in 2023. All of the major indexes fought their way into the green after beginning the day deep in the red. Bank earnings weighed on equities to start the day, according to Ross Mayfield, an investment strategy analyst at Baird. However, sentiment reversed as investors appeared to shrug off negative news that was expected to some degree.
Wells Fargo, whose profits for the last quarter had been cut by half, said it’s preparing for the economy to “get worse than it’s been over the last few quarters.” And then there's JPMorgan Chase who posted revenue that beat expectations, but even so, the bank warned it’s setting aside more money to cover credit losses because a “mild recession” is its “central case.” The CEOs of Citigroup and Bank of America also said they’re anticipating a “mild recession.”
CHART OF THE DAY
Volkswagen AG reported its lowest sales in more than a decade, but said it was confident business would improve this year as supply-chain blockages ease and semiconductors become more easily available. VW, which also includes brands Skoda and Seat, luxury-car maker Audi, and sports-car maker Porsche AG, said Thursday that global sales dropped 7% to 8.3 million vehicles, as supply- chain constraints shut down some factories in Europe after Russia’s invasion of Ukraine and Covid-19 measures in China. The steepest decline in sales was in Central and Eastern Europe due to the war in Ukraine. VW said sales plunged 33% in the region to 441,900 vehicles.