Markets shot up out of the gate & remain higher. Dow is up 110, advancers ahead of decliners 3-1 (might have expected an even larger spread given these heady markets) & NAZ was up 24. Favorable earnings from Dow stocks Intel (INTC) last night & JPMorgan (JPM) before trading began are taking Dow sooo close to 10K. As expected, banks are up sharply after the JPM report, the Financial Index reached another yearly high.
Value___209.24
Change____4.57
% Change__2.2%
MLPs continue strong, the Alerian MLP Index was up 1+ to the 260s. The Dow Jones REIT Index rose 3 & junk bond funds reached new yearly highs. Treasuries sold off in this bullish stock market rally. The yield on the 10-year Treasury bond went up 8 basis points to 3.39% heading back for the 3½% area where it has spent much of its time since Jun. Oil is hot, up 1 to almost 75, helped by enthusiasm for a speedy economic recovery. This is its highest level in a year. Higher stock markets pulled gold down 4, to just under 1060 after topping 1070.
JPMorgan reported strong Q3 earnings as its investment banking business more than offset rising loan losses that the bank warned would continue for the foreseeable future. JPM, the first big bank to report earnings for Q3, had a $3.6B profit but also said it roughly doubled the amount of money set aside for failed home & credit card loans. CEO Jamie Dimon said, "Credit costs remain high and are expected to stay elevated for the foreseeable future in the consumer lending and card services loan portfolios." For the 2nd straight qtr there are some signs of stabilization in delinquencies among consumer loans that are only recently past due. But Chief Financial Officer Mike Cavanaugh said that the bank "can't at the moment be certain" that the trend will continue. Traders were more interested in its investment bank net income which rose to $1.9B, almost double last year's results as fixed income trading thrived. JPM is up 1.66. In addition, INTC is up 62¢ after last night's earnings report.
•JPMorgan Profit Rises More Than Estimated as Fixed-Income Revenue Surges
Dow wants to take out 10K, hopefully it will do that soon & get it over with. I remember over 10 years ago, the first time, when floor traders broke out 10K caps. The JPM report was significant. With the dichotomy in its businesses, it is a case of the glass is half full for half empty. Markets see it as half full. At 10K, the Dow will be up an astounding 53% from its Mar 6 low with hardly a hiccup along the way. Bulls remain in charge.
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