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Doherty at the Close 7.13.2012

J.P. Morgan sat atop the Dow’s leaderboard after the bank reported that second-quarter earnings fell from a year ago, but results exceeded expectations. Many investors were cautious on JP Morgan (JPM) as they awaited news on the size of the London Whale loss, ultimately revealed to be $4.4 billion in the second quarter.

Financial-sector stocks led all 10 of the S&P 500′s sectors higher, with strong earnings by Wells Fargo lending support for the rally. Wells climbed after the bank posted a 17% rise in second-quarter profit, as income in the bank’s mortgage-banking business rose.  Following their lead, Citigroup (C), Goldman Sachs (GS), and Morgan Stanley (MS) also gained on the day.

European markets were mostly higher, with the Stoxx Europe 600 adding 1.3%, amid China’s economic reading and solid demand at an Italian bond auction. Europe’s stock benchmark has risen for each of the last six weeks.

Asian markets were mostly higher following China’s economic report. China’s Shanghai Composite inched up less than 0.1%, while Japan’s Nikkei Stock Average added 0.05% to break a six-session slide. Hong Kong’s Hang Seng Index gained 0.4%.

In U.S. corporate news, Bridgepoint Education fell after the company, which operates Ashford University and University of the Rockies, said Ashford is being monitored by a higher education commission to confirm that the university meets criteria for accreditation.

Cytec Industries rose after the chemical and material technology firm predicted earnings well above analyst expectations for the second quarter. 

Thomas Doherty is marjoring in economics and Finance at Villanova University. Thomas@KeeneOnTheMarket.com

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Halftime Report 7.13.2012

S&P 500 futures rose a whopping 19 points to 1348.25, NASDAQ futures rose 35.50 points to 2573.25, and Dow Jones Industrial Average futures rose 190 points to 12692.00.

Gold futures rose $25.80 to $1591.10 and oil gained 89 cents to $86.87.

EUR/USD futures continued their cycle of short covering after dropping the previous day. This morning the pair was trading at $1.2250, up 44 pipps. I am looking to fade the pair when it reaches $1.2300.

New York & Co. (NWY) surged over 14% as it expects Q2 earnings to exceed previous forecasts.

Lexmark International (LXK) a classic printer company, fell over 14% after cutting its Q2 earnings to a range between 87-89 cents, down from 95 cents to $1.05 a share.

J.P. Morgan’s earnings release helped lift markets after reporting higher than expected earnings. They reported a net income of $4.96 billion or $1.21 a share and net revenue of $22.18 billion.


David Cornes holds a degree in economics from the University of Montana.

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Movers and Shakers – JPM – 7.13.2012

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.

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Chris Cruises the Globe 7.13.2012

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

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Morning Rage 7.13.2012

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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