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Pre-Market Primer: World Bank Predicts Weak 2013; Big Bank Earnings Rise


JPMorgan and Goldman Sachs had a great fourth quarter.

Stocks are set to decline today amidst reduced expectations for global growth and strong earnings from major financial players.

Consumer prices in the United States were flat in December, right in line with expectations. Excluding food and energy, prices rose just 0.1%.

A separate report later today is expected to show that US industrial production rose 0.2% in December after gaining 1.1% in November. Economists say that manufacturing grew by 0.4% over the month. The National Association of Home Builders' Housing Market Index is also due out this morning, expected to show a one-point improvement to 48 for January.

Before the opening bell, stock futures pointed to a lower open. Dow (INDEXDJX:.DJI) futures fell 0.36% to 13,416. S&P 500 (INDEXSP:.INX) futures dropped 0.18% to 1,462.60. Nasdaq (INDEXNASDAQ:.IXIC) futures ticked up 0.05% to 2,715.75.

The World Bank slashed its estimate for world economic growth again. Its forecast is for global growth of just 2.4%, down from the 3% that it projected in June. The eurozone is slated to contract by 0.1%

"While diminished, downside risks to the global economy persist and include a stalling of progress on the euro area crisis, debt and fiscal issues in the United States, the possibility of a sharp slowing of investment in China, and a disruption in global oil supplies," the Washington-based organization wrote in its report.

JPMorgan Chase (NYSE:JPM) reported today that net profit rose 54% to $5.7 billion on $22.4 billion in revenue in the December quarter. Earnings per share came in at $1.39, beating estimates of $1.16. The strongest gain for the bank came from its mortgage business, which reported originations of $51.2 billion, up 33%. Consumer deposits rose 10%. The bank also concluded its review of the Chief Investment Office's (read: London Whale's) losses that were first disclosed in May, 2012.

Goldman Sachs (NYSE:GS) also beat earnings expectations with $5.60 per share on $9.24 billion in revenue. Goldman's book value per share rose 11% to $144.67.

Boeing (NYSE:BA) shares were down 3.87% after technical malfunctions on the 787 aircraft prompted Japan Airlines (PINK:JALFQ) and All Nippon Airways (PINK:ALNPY) to ground their entire fleet of the planes.

General Motors (NYSE:GM) expects its earnings and margins to be flat this year, CFO Dan Ammann said today. The company expects US sales volume to grow 5%, and Europe's to fall 4%. This is a much more bearish call than that of Wall Street analysts.

Fresh off yesterday's disappointing GDP data, Germany reduced its growth forecast for 2013. The government projects growth of just 0.4%.

The euro to US dollar ratio fell 0.19%to 1.3281 after Jean-Claude Juncker, the current head of the Eurogroup of finance ministers, warned that "the euro foreign-exchange rate is dangerously high." Eurozone consumer price inflation remained steady at 2.2% in December.

European car sales fell 16.3% on a yearly basis last month, totaling 799,407 vehicles, according to Acea. For the full year of 2012, sales fell 8.2% to 12.05 million vehicles.

As the yen strengthened against the dollar for a second straight day, Japanese stocks suffered. The Nikkei Index (INDEXNIKKEI:.NI225) closed down 2.56%. Japanese machine orders rose 3.9% in November, beating expectations of a 0.3% rise and October's 2.6% gain.

Twitter: @vincent_trivett
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