XLF

JP Morgan and Wells Fargo Report Third Quarter Results

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Friday morning was big for banks, as both JP Morgan Chase (click ticker for report: ) and Wells Fargo (click ticker for report: ) reported third quarter results. Earnings for JP Morgan surged 37% year-over-year to $1.40 per share, which was much higher than the consensus expectation of $1.24 per share. Revenue grew 6% year-over-year to $25.9 billion, slightly better than consensus expectations. Earnings at Wells Fargo came in at $0.88 per share, a penny better than consensus estimates. Revenue fell $100 million sequentially to $21.2 billion, which was a little over $200 million short of consensus expectations. Though net interest margins slipped at both banks, the third quarter showed impressive results from the mortgage business. Mortgage originations at JP … Read more

JP Morgan Posts Fourth-Quarter Results; Sees Improving Loan Demand and Credit Quality

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JP Morgan (JPM), the largest bank in the US by assets, reported fourth-quarter results Friday that showed declining profits but solid loan growth, credit-quality improvement, and continued strength in its fortress balance sheet. We continue to hold positions in the Financial Select Sector SPDR ETF (XLF) and the SPDR S&P Bank ETF (KBE) in the portfolio of our Best Ideas Newsletter, but not any bank specifically as we seek to dodge firm-specific risk within the banking sector at this time. However, we think the US banks will have a nice year during 2012 as unemployment (now 8.5%) and housing trends improve (new order growth). JP Morgan’s fourth-quarter net profit fell to $3.7 billion ($0.90 per share) from $4.8 billion ($1.12 per … Read more

Volatility Spikes, Oh Cisco, the Mighty US Dollar, and More

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Image Source: CBOE Let’s talk about recent market events May 17. There’s a lot going on. By Brian Nelson, CFA It looks like volatility is back in a big way, with “all 29 volatility indexes at the CBOE ris(ing) today,” one more-than-doubling, the CBOE Short-Term Volatility Index (VXST). The ridiculously-named “fear gauge” or “fear index” or the CBOE Volatility Index, the VIX (VIX) leapt nearly 50%. On May 17, we effectively bought volatility intraday by adding put options to the newsletter portfolios, both on the S&P 500 SPDR (SPY) and Netflix, a company whose valuation we think remains ridiculous. We may continue to add put options on entities whose equity prices we believe have become too stretched, positions that may … Read more

ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

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President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more