Big Banks Report Big Profits
| Recent Top 5 Positions | |||
| Ticker | Position | Sell Date | Return |
| ALJ | Long | 2/14 | +49.8% |
| ECTE | Long | 4/14 | +35.2% |
| JOEZ | Long | 4/11 | +42.2% |
| HILL | Long | 1/31 | +55.5% |
| AXK | Long | 5/31 | +30.2% |
| Click here for consistent returns with TradeMaster Daily Stock Alerts. | |||
The indices overseas were mostly lower today, although Europe got a slight pop after JPMorgan (NYSE: JPM) second quarter earnings were announced this morning. JPM stock was also up 3% following that news. The mega U.S. bank once again beat estimates and grew profits. JPMorgan reported $5.4 billion in income or $1.27 per share in the second quarter. That compares with earnings of $1.09 one year ago.
The great results from JPM gave the U.S. indices bullish momentum at the open. However, JPM results were weighted against a slew of economic data before the bell: initial jobless claims, continuing claims, retail sales and PPI.
The employment data is a weekly statistic, and while it's important, it's a figure that is often overlooked especially when other data is presented alongside. And today the other data is far more important. Retail sales, which will impact TradeMaster long HOTT, are used as a gauge for consumer spending. And in the U.S. where the consumer is over 60% of GDP, consumer spending is used to gauge U.S. economic health.
On the other hand, PPI is the cost producers pay for goods or services. In the past the PPI has increased more than CPI, which comes out tomorrow, and is what the consumer pays for goods and services. It is widely viewed that higher costs in manufacturing will eventually be passed on to the consumer, and if the consumer isn't strong enough to absorb those costs retail sales will fall.
The results today showed positive changes in retail sales and costs. Analysts were looking for a monthly 0.2% drop in retail sales and the same drop for PPI. The actual results were a rise of 0.1% from retail sales and a 0.3% drop in PPI.
After the bell today technology stand out Google (Nasdaq: GOOG) reports earnings. As many long-time readers know, I think GOOG is a fantastic company and I have my own personal money invested in it. I will continue to hold my shares, but I will be focused on margins.
Last quarter margins declined and I don't want that contraction to become the norm. Also, Google+ was launched in June and I am interested to see what management thinks of the service, which directly competes with Facebook.
Shares have risen since the launch of Google+ which means the street has high hopes for the social networking service.
Currently the TradeMaster portfolio is positioned long, and I intend to keep it that way. But if earnings reports begin to disappoint investors and economic data continues to be tepid I will recommend to cash-out and go short.
