JP Morgan

Tough Day For Stocks…

Posted on by George Mahfouz

Stocks took it on the chin today with most of the major averages closing in the red. On the day, the Dow Jones Industrial Average (chart) closed down 279.47 points, the Nasdaq (chart) closed lower by 75.97 points, the S&P 500 (chart) closed the day off by 23.81 points and the small-cap Russell 2000 (chart) lost 21.04 points. Fears from Asia to Europe are spilling over in to U.S. Equities. Securities regulators in China are banning certain types of equities financing which will have an effect on margin trading. Furthermore, across the pond in Europe, investors are becoming more worried about Greece and whether or not that country will be able to make payments on debts that are coming due and whether or not Greece will even stay in the eurozone.

Despite today’s selloff, Q1 earnings have not been too shabby so far, especially out of the banking sector. Earlier this week, JP Morgan (NYSE: JPM) reported a $5.91 billion dollar profit or $1.45 per share surpassing most analysts expectations and Citigroup (NYSE: C) also exceeded analysts expectations by posting a $1.51 per share in earnings compared to the $1.39 per share the street expected. The stock that caught everyones attention this week was Netflix (NasdaqGS: NFLX). Netflix (chart) reported in their earnings release that almost 5 million subscribers came online compared to the 4 million analysts anticipated. This metric alone gave Netflix’s stock a boost of almost $90 dollar a share yesterday.

Fast forward to next week and we will get earnings results out of Morgan Stanley (NYSE: MS), Verizon (NYSE:V), United Technologies Corp (NYSE: UTX), Yahoo (NasdaqGS: YHOO), Boeing (NYSE: BA), eBay (NasdaqGS: EBAY), Facebook (NasdaqGS: FB), Qualcomm (NasdaqGS: QCOM), The Coca-Cola Co (NYSE: KO), Tractor Supply Co. (NasdaqGS: TSCO), 3M Co (NYSE: MMM), Amazon (NasdaqGS: AMZN), Eli Lilly & Co. (NYSE: LLY), General Motors (NYSE: GM), Google (NasdaqGS: GOOGL), Microsoft (NasdaqGS: MSFT), Newmont Mining (NYSE: NEM), Southwest Airlines (NYSE: LUV), Starbucks Corp (NasdaqGS: SBUX) and Biogen (NasdaqGS: BIIB) just to name a few. I think it’s safe to say we will get a very broad look as to how corporate America is faring after all of these earnings results come forward.

Have a great weekend and good luck next week 🙂

~George

Stocks Go On A Wild Ride!

Posted on by George Mahfouz

As the new year begins to unfold, volatility has taken command! Yesterday, the Dow Jones Industrial Average (chart) had a 424 point intraday swing, an intraday move not seen in quite sometime. Volatility continued to surge this morning as stocks opened down sharply by weaker than expected retail sales for the month of December, and JP Morgan (NYSE: JPM) announcing weaker than expected quarterly results. So is this the new norm? Investors and especially traders have been waiting a long time to see volatility come back into the market and they may have just gotten what they have been expecting. For years, stocks have been in a low vol environment thanks in part to the Federal Reserve’s easy monetary policies. Now that those policies have and are winding down, it’s no surprise to me that volatility has picked up. Furthermore, now that we are have entered into Q4 earnings reporting season, I expect that volatility will remain elevated and possibly increase.

Companies that are scheduled to report their earnings results are over the next week are; Citigroup (NYSE: C), Intel (NasdaqGS: INTC), Goldman Sachs (NYSE: GS), Delta Airlines (NYSE: DAL), International Business Machines (NYSE: IBM), Morgan Stanley (NYSE: MS), Netflix (NasdaqGS: NFLX), American Express (NYSE: AXP), eBay Inc. (NasdaqGS: EBAY), Starbucks (NasdaqGS: SBUX), Verizon Communications (NYSE: VZ), General Electric (NYSE: GE), Honeywell International ( NYSE: HON) and McDonald’s Corp (NYSE: MCD) just to name a few.

More now than ever I will be focusing on “top-line” growth of corporate America to see if this most recent sell-off poses a buying opportunity. If the top-line of companies do not begin to grow in a meaningful way, I would expect the selling pressure to continue. Good luck to all 🙂

~George

Bank Stocks Finally Catch A Bid!

Posted on by George Mahfouz

As earnings reporting season kicks into high gear one of the sectors that are surprising investors to the upside are the banks. Citigroup (NYSE: C) started things off yesterday reporting an adjusted earnings per share of $1.24 compared to the $1.05 most analyst’s were anticipating. This earnings beat has lifted Citigroup’s stock over 3% the past two days. This morning Goldman Sachs Group (NYSE: GS) also announced an unexpected profit of $2.04 billion dollars or $4.10 per share while analysts were expecting earnings of $3.05 a share. This beat sent Goldman’s shares up 2% this morning although there could be a short term technical hurdle in the $171.oo range (chart) that GS may face. Back in mid-June, Goldman had a high of $171.08 before losing 5.5%. Goldman’s shares have since rebounded back to the $170 zone. Should GS be able to break through the $170 zone, it could very well test its 52 week high of $181.13. If it cannot break through this short term resistance zone in a meaningful way, then a possible re-test of the mid-June lows could occur (chart). Also reporting this morning before the market opened was JP Morgan Chase (NYSE: JPM). JP Morgan reported an earnings beat of $1.46 compared to $1.29 per share most analysts were expecting. This unexpected earnings beat sent shares of JP Morgan Chase (chart) up more than 2% in early morning trading. Whether or not this is a short term bounce or the beginning of a new trend for the banking sector has yet to be seen. I would suspect that the banking pundits will want to see a widening of yield spreads before they get too bullish.

After the bell, the focus will turn to the tech sector. Both Intel (NasdaqGS: INTC) and Yahoo (NasdaqGS: YHOO) will report their quarterly results. Intel has been on a tear gaining over 20% since mid-May (chart). In my humble opinion, Intel is really going to have to crush their numbers and up forward guidance in order for their stock to keep rising here in the short term. Yahoo on the other hand seems to be trading on what Alibaba’s valuation will come out as when they go public in the near future. Two other bellwether tech stocks Ebay (NasdaqGS: EBAY) and Google (NasdaqGS: GOOGL) will report their quarterly results tomorrow and Thursday respectively. So as you can see there are trading opportunities abound, however, my preference is to wait to see how companies report before making any trading or investment decisions. I do think this earnings reporting season will dictate how the overall markets will fare in the second half of this year. So far so good in this reporting season, but there are hundreds of companies yet to report so let’s not draw any significant conclusions. Also, please remember it is good practice to consult with a certified and trusted financial advisor(s) before making any adjustments to your current portfolio or making any investment decisions for that matter.

Good luck to all 🙂

~George