CE 100 Index Gains 1.7% as JPMorgan Leads Banks Higher

Earnings season is here — as always, led by the banks, and the banks led the CE 100 Index 1.7% higher through the past week.

As a group, the banks were up 4.4%, and only two pillars, including the “Live” and “Have Fun” segments, showed slight losses.

Within the banking pantheon, JPMorgan’s stock rallied 5.2%. As we reported in the wake of earnings, in the words of CFO Jeremy Barnum, consumer spending is seeing a period of “normalization” as consumers are on “solid footing.”

As detailed in the company’s earnings supplementals, overall debit and credit card sales volumes were up 6% in the most recent period, to a combined $453.4 billion, and flat with the first quarter of this year.

Though there’s a tempering of the pace seen in past quarters, where those volumes were up in the high single-digit percentages as shown in past reports, Barnum also told investors and analysts on the conference call Friday morning that “given the levels where it started from, what we see is actually like normalization,” as the labor market remains strong.

At the same time, the company maintained its expectations, as noted in its Investor Day 2024 presentations, that net charge-offs on its card loans would be 3.4% for the year.

Elsewhere within the banking group, LendingClub shares gathered 7.2% on the news that the firm and AI lending network Pagaya have acquired Tally Technologies’ intellectual property.

Tally, a FinTech that helped consumers manage credit card debt, closed its doors in August.

LendingClub said the purchase will quicken the evolution of its member engagement platform.

For its part, Pagaya said the purchase helps it bolster its consumer lending technology solution for the financial ecosystem, as it can now provide advanced credit management solutions that its lending partners can offer customers under their brands.

Citigroup shares were 5% higher. As reported, Citi said its Token Services for Cash program has gone live after a pilot phase. The new commercial solution processes multimillion-dollar transactions and offers clients “24/7, always-on” cross-border liquidity and payments between participating Citi branches.

The tool was created with a private and permissioned blockchain solely owned and managed by Citi, with clients not required to hold or manage any tokens to access the services.

Payments-focused names were the second highest performing pillar in the CE 100 Index, up 3.6%.  

Buy now, pay later names (BNPL) led the moves to the upside here, as Affirm shares soared 19.6%. As was reported by several investing sites this past week (such as GuruFocus), the company was on the receiving end of three Wall Street upgrades, including from Wells Fargo, which took the name to an “overweight” rating and a $52 price target. The partnership with Apple and declining interest rates should help the company grow. Other rating upgrades came from Morgan Stanley, with an “equal-weight” rating, where the previous rating had been “underweight,” and BTIG rated the name a “buy.”

Sezzle, as might be expected, also gained ground within the Pay and Be Paid segment on positive BNPL sentiment, as the stock rallied more than 15%,

Uber’s stock gathered 16.2%, pushing the Move pillar 3.5% higher, despite Tesla’s slide within that same segment. The two names were, arguably, two sides of the same coin in terms of headlines.

Uber gained in the wake of Tesla’s underwhelming debut of its “cybercab,” which arrived about four years after its originally anticipated launch date. Tesla said it will start building the fully autonomous Cybercab by 2026 or 2027 and sell it for a price of less than $30,000, as well as the debut of a sister-vehicle Robovan, capable of transporting up to 20 people. However, as had been widely reported, the Tesla event did not have much detail on a robotaxi service, which seemingly put Uber investors at ease. Tesla’s shares sank just under 13%.

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