WFC - JP Morgan Kicks Off Earnings Season Intel And AMD China Problem Potential Iranian Attack | Benzinga
To gain an edge, this is what you need to know today.
High Expectations
Please click here for an enlarged chart of JPMorgan Chase & Co (NYSE: JPM).
Note the following:
- This article is about the big picture, not an individual stock. The chart of JPM stock is being used to illustrate the point.
- JP Morgan has kicked off earnings season.
- The chart shows that immediately after earnings release, JPM stock fell about 5%.
- The chart shows that the dip buyers immediately stepped in with aggressive buying.
- The chart shows the rising trendline after JPM reported earnings in January.
- The chart shows that after today’s earnings release the trendline is broken, at least temporarily.
- JPM reported EPS of $4.63 vs. $3.82 consensus. JPM reported revenues of $42.5B vs. $38.53B consensus.
- Even though JPM reported better than consensus, whisper numbers have been jacked up going into earnings. Whisper numbers are the numbers analysts privately share with their best clients. These numbers are often different from the numbers the same analysts publish. This is a technique used by analysts to generate business.
- The foregoing illustrates why you need to be very careful following Wall Street analysts unless you are one of their best clients. Prudent investors depend on independent, objective sources such as The Arora Report for analysis.
- Bank earnings are very complex. Here is a plain English analysis from The Arora Report of JPM earnings:
- The quarter was fine.
- The guidance was slightly less than expected.
- Going forward, expenses will be higher than expected.
- Going forward, NII will be slightly less than expected. NII is the difference in the interest income between what the bank charges borrowers and what the bank pays to depositors.
- As full disclosure, JPM is in The Arora Report ZYX Buy Model Portfolio. It is long from $34.14.
- Citigroup Inc (NYSE: C) reported earnings better than the consensus and better than whisper numbers. Citigroup is a restructuring story. So far, restructuring appears to be working.
- Citigroup is the most lucrative stock among major banks, but consider buying it only in the buy zone. As full disclosure, Citigroup is in the portfolio that ...