Alcoa Beats!
Last week's rally ahead of earnings was a good indication that the stock market had priced in lower 2Q earnings estimates. And in fact, stock prices fell to the point where some upside was possible as earnings come in. It sounds simplistic, but sometimes, stock prices must sell-off before they can rally.
Alcoa's (NYSE:AA) earnings last night were excellent. It would have been predictable for Alcoa to miss on revenues and still come in with the right earnings-per-share number. But Alcoa beat on revenues and boosted aluminum demand for the year.
Perhaps even more importantly, railroad company CSX (NYSE:CSX) reported that auto shipments were up big.
Both Alcoa and CSX are benefiting from an economic recovery that many investors believe had softened in the second quarter.
*****I've already stolen much of the thunder from TradeMaster Jason Cimpl's pre-market alert. But I will share his outlook with you:
"I want to see two things in the market today. First, I want to see the bulls challenge 1085 resistance. Buyers have rallied the indices 6% in a very short time, don't stop at 1080.78. Second, volume needs to pick up. Yesterday's volume was low, very low. As long as it picks-up today, I will attribute yesterday's action to earnings uncertainty. Now that a few reports are in, volume needs to pick-up, especially in an up-day."
Jason got his readers into 5 new positions last week to take advantage of the upside he saw coming. All those positions are up between 4% and 10%. If you want to learn how Jason's recommendations manages to be so consistently profitable, check out his 5-part video instructional series called TradeMaster Boot Camp. It's free and you'll learn a lot.
*****The stocks I've mentioned recently, Citigroup (NYSE:C), JP Morgan (NYSE:JPM) and Maguire Properties (NYSE:MPG) in Daily Profit have all moved higher. I don't run a portfolio on recommendations I include in this letter, but I'd still like to hear how you've done on these, so feel free to drop me a line at dailyprofit@wyattresearch.com.
Now, as for my outlook on these stocks…
I think you could hold them all long-term if you want to. But I tend to take a little more short-term perspective here in the Daily Profit. Maguire could see $3.50 to $4 over the next couple of weeks
I expect JP Morgan (NYSE:JPM) moves higher after it reports Thursday morning, but I think Citigroup (NYSE:C) may be a "sell the news" event. So I would look to take gains before Citigroup earnings, which are before the bell this Friday.
*****Oil is rallying today. That's a clear indication that investors are feeling a bit more optimistic about the pace of economic recovery.
