JPM reported net income of $4.96 billion, $1.21 a share, a decrease from $5.43 billion or $1.27 a share last year. Total revenues decreased to $22.18 billion. These are impressive numbers considering that they include losses on the CIO’s balance sheet of $4.4 billion from the London Whale fiasco. Jamie Dimon did say that the synthetic credit portfolio division responsible for the loss would be closed.
Profit declined 7% in the investment banking division due to lack of revenues when compared to a year before.
David Cornes holds a degree in economics from the University of Montana.
Construction stocks were up with the GDP news as were banks with CCB up .6% and ICBC up .8%. Underperforming were China’s power producers as power output was flat in June after rising 2.7% in May.
Europe is jumping on the slight rally in Asia with the FTSEurofirst up .4%. Basic resources and miners shares rose currently showing miner Petropavlovsk up 1.8% and Steelmaker Voestalpine up 1.3%. Italian Banks received an unexpected hit today as Moody’s downgraded Italy’s government bond two notches to Baa2, banks are down about 1%. Data also showed foreign deposits in Italian banks have dropped 20% on the year in April.
Moody’s also put London Automaker Peugeot on review for a downgrade battering their stocks down 8.8%.
Nokia is planning on closing 2 of its distribution centers in China as a part of its restructuring process, shares are up .5% pre-market.
JPMorgan was off to a great start after beating revenue predictions by 1B, however upon showing all of the write offs, wilting credit spreads, investment banking fees down 35%, and advisory fees down 41% the stock tanked from 2.1% to a current pre-market trade of -2%.
Commodities begin another session mixed with crude and gold up while silver and natural gas are down.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
For the economy today there is the Producer Price Index announcement at 8:30AM EST and the Consumer Sentiment consensus at 9:55AM EST. The PPI fell in April and May, 0.2% and 0.1% respectively and is expected to continue that trend. The consumer sentiment consensus is supposedly to yield a decline as well.
Turning to the stock market, the S&P 500 is down once again at the open at 0.50%. Today though, 10-year treasuries are up 0.27% and so is oil at 0.88%. The dollar joins that uptrend with an increase of 0.002 points.
On the brighter side, there is hope for the S&P 500, today China announced that its growth has slowed to 7.6%, the same as analysts’ expectations. This confirmation of the state of China caused futures to rise as everyone was assured that the situation was not worse than it seemed. Now that the stock futures are rising, hopefully the S&P 500 will bounce back as well.
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In corporate news, Supervalu (SVU) plunged, losing nearly half of its value, after suspending its divident and withdrawing financial projections for the year for pricing pressure. Supervalu reported worse than expected quarterly results and is considering selling part o its heavy debt.
Marriott International (MAR) dropped -6.44% after warning of weakenign expansion overseas. In Europe, the Stoxx Europe lost -1.1% despite an increase in May industrial production in the euro zone. The Hang Seng fell -2% and the euro fell versus the dollar.
It looks to me like the markets are in a downward trend with the occasional short cover to wipe out anyone with a modest stop. I am active in the S&P 500 futures and EUR/USD futures markets and have found that my short entries after a strong short-term short cover perform the best.
S&P 500 futures fell 8.50 points to 1328.00, NASDAQ futures fell 25.00 points to 2536.50, and Dow Jones Industrial Average futures fell 33 points to 12503.00.
Corn had another strong rally, gaining 21.5 cents and rising to $7.2540 a bushel.
Gold futures fell $8.90 to 1566.80 and WTI crude futures fell 69 cents to $85.62.
Infosys Ltd ADR fell over 10% after weak guidance on the global economic slowdown. In my opinion this earnings season has been full of weak guidance forecasts due Europe and China’s slowdown.
Netflix Inc. (NFLX) posted yet another gain of 1.42% on another trivia bit from the CEO claiming that more than 1 billion hours of streaming video service were watched in June.
Groupon Inc. is currently up just under a percent on the day, however it reached a new low of $7.34. Maybe there is a bargain in this coupon stock?
Along with oil’s fade, Marathon Petroleum Corp. fell 2.73%.
David Cornes holds a degree in economics from the University of Montana.
Before the opening bell, India’s second largest software company posted 5% revenue growth guidance number based on customers’ budgets, as opposed to 8-10% estimated in April. The Bangalore based It company reported sales of 9,616 Indian Rupees and a 33% rise in net profit for Q1 ending June 30. Net income increased to $412 million. INFY estimates $7.34 billion in revenue for the 2012 fiscal year.
Infosys, along with other IT companies is battling a lack of demand from businesses as they are less likely to spend more on IT as the global economy is in an economic slump. Gartner Inc., an IT researcher reported that Global IT spending is slowing due to weak Chinese, European and U.S. economies.
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