Dow fell 98, decliners over advancers 4-1 & NAZ was off (percentage wise) a bigger 34. Banks stocks led the selling as earnings reports are coming in. The MLP index was flat in the 386s & the REIT index fell 1+ to the 248s. Junk bond funds were mixed & Treasuries rose taking the yield on the 10 year Treasury back below 2%. Oil was lower & gold pulled back.
Photo: Yahoo
The annual rate of GDP growth for China in Q1 slowed to 8.1% from 8.9% in Q1, according to the National Bureau of Statistics. It was also below the 8.3% forecast. China's stock market rallied despite the disappointing data, on the hope that the poor results would spur more assistance from the gov, perhaps easier lending terms or more gov spending. But China's fiscal policy has been firmly pro-growth since the autumn of 2011 & easier monetary policy in the form of 100 basis points of required reserve ratio (RRR) cuts has given banks some 800B yuan of extra cash to lend. A huge bounce in new lending in Mar, 25% ahead of forecasts, at 1T yuan, signals that money is being put to work & the view is that there's at least 1.2T yuan more already earmarked for action for the rest of the year. Economic growth was last this low in Q4 2009, when the gov supplied 4T yuan of stimulus to escape the grip of a financial crisis that had driven global trade, to which China's growth is levered, to a virtual halt.
Weak China GDP Growth no Signal for Fresh Stimulus
Photo: Bloomberg
Consumer confidence cooled in Apr from a one-year high as Americans’ assessment of their financial situation eased. The Thomson Reuters/University of Michigan’s preliminary index of consumer confidence dropped to 75.7 from 76.2 last month. It was projected to hold at 76.2. Tempered optimism follows a slowdown in employment gains last month & a decline in stock prices in the last 2 weeks. At the same time, gas prices close to $4 a gallon pose a risk for consumer purchases that account for about 70% of the economy. The Michigan index of current conditions, which reflects perceptions of the financial situation & whether it’s a good time to buy big-ticket goods like cars, declined to a 4-month low of 80.6 in Apr from 86 a month earlier. The gauge of consumer expectations for 6 months from now, which more closely projects the direction of consumer spending, climbed to 72.5, the highest since Sep 2009, from 69.8 in Mar.
U.S. Michigan Consumer Sentiment Decreased to 75.7 in Apr
Photo: Bloomberg
JPMorgan Chase, the largest bank in the country, issued more mortgage loans in Q1 & turned a bigger profit than expected. EPS was $1.31, beating expectations of $1.16. But revenue & profit declined at most businesses, including investment banking. CEO Jamie Dimon said the bank expects high costs from the bursting of the real estate bubble last decade "for a while longer." The bank set aside $2.5B to fight legal battles, including over foreclosures. There were bright spots: customers continued to pay credit card bills & mortgage loans on time, which allowed the bank to pick up $1.8B from the reserves it had set aside to cover loan losses (but not ongoing earnings). It issued 6% more mortgage loans, & applications for mortgages grew 33% as more customers took advantage of historically low rates to refinance their loans. The mortgage business earned $461M, reversing a loss last year. Overall, earnings fell 3% from the prior year, while its revenue grew 6% to $24.4B. JPM also gained $1.1B from a settlement related to Washington Mutual, the failed bank it bought during the depths of the 2008 financial crisis. Though the bank ranked first in investment banking fees globally in Q1, revenue & income fell, reflecting turbulence in the markets because of fears that Greece might default on its debt. Even though the stock market rallied in Q1, trading volume was low as many investors, particularly individuals, decided to stay away. Revenue at its investment bank was $7.3B, compared with $8.2B last year, & fees fell 23% to $1.4B. The stock fell 72¢ on this mixed picture.
Even after yesterday's big gain, Dow is down 175 in a drab week. Expectations for earnings are not great & the reports will deliver less than inspiring results. Treasuries had a bad Q1 after an outstanding year in 2011. But they have been in favor in the last month. Gold, the other main safe haven investment, is not seeing a pickup in demand but that may be hurt by reduced buying from India. Markets are on defense & may have a tough period as earnings are reported.
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.081% | |
U.S. 2-year | 0.274% | |
U.S. 10-year | 1.996% |
| CLK12.NYM | ...Crude Oil May 12 | ...103.03 | ...... 0.61 | (0.6%) |
| GCJ12.CMX | ....Gold Apr 12 | .........1,666.50 | ... 13.00 | (0.8%) |
Get the latest daily market update below:
The annual rate of GDP growth for China in Q1 slowed to 8.1% from 8.9% in Q1, according to the National Bureau of Statistics. It was also below the 8.3% forecast. China's stock market rallied despite the disappointing data, on the hope that the poor results would spur more assistance from the gov, perhaps easier lending terms or more gov spending. But China's fiscal policy has been firmly pro-growth since the autumn of 2011 & easier monetary policy in the form of 100 basis points of required reserve ratio (RRR) cuts has given banks some 800B yuan of extra cash to lend. A huge bounce in new lending in Mar, 25% ahead of forecasts, at 1T yuan, signals that money is being put to work & the view is that there's at least 1.2T yuan more already earmarked for action for the rest of the year. Economic growth was last this low in Q4 2009, when the gov supplied 4T yuan of stimulus to escape the grip of a financial crisis that had driven global trade, to which China's growth is levered, to a virtual halt.
Weak China GDP Growth no Signal for Fresh Stimulus
Consumer confidence cooled in Apr from a one-year high as Americans’ assessment of their financial situation eased. The Thomson Reuters/University of Michigan’s preliminary index of consumer confidence dropped to 75.7 from 76.2 last month. It was projected to hold at 76.2. Tempered optimism follows a slowdown in employment gains last month & a decline in stock prices in the last 2 weeks. At the same time, gas prices close to $4 a gallon pose a risk for consumer purchases that account for about 70% of the economy. The Michigan index of current conditions, which reflects perceptions of the financial situation & whether it’s a good time to buy big-ticket goods like cars, declined to a 4-month low of 80.6 in Apr from 86 a month earlier. The gauge of consumer expectations for 6 months from now, which more closely projects the direction of consumer spending, climbed to 72.5, the highest since Sep 2009, from 69.8 in Mar.
U.S. Michigan Consumer Sentiment Decreased to 75.7 in Apr
JPMorgan Chase, the largest bank in the country, issued more mortgage loans in Q1 & turned a bigger profit than expected. EPS was $1.31, beating expectations of $1.16. But revenue & profit declined at most businesses, including investment banking. CEO Jamie Dimon said the bank expects high costs from the bursting of the real estate bubble last decade "for a while longer." The bank set aside $2.5B to fight legal battles, including over foreclosures. There were bright spots: customers continued to pay credit card bills & mortgage loans on time, which allowed the bank to pick up $1.8B from the reserves it had set aside to cover loan losses (but not ongoing earnings). It issued 6% more mortgage loans, & applications for mortgages grew 33% as more customers took advantage of historically low rates to refinance their loans. The mortgage business earned $461M, reversing a loss last year. Overall, earnings fell 3% from the prior year, while its revenue grew 6% to $24.4B. JPM also gained $1.1B from a settlement related to Washington Mutual, the failed bank it bought during the depths of the 2008 financial crisis. Though the bank ranked first in investment banking fees globally in Q1, revenue & income fell, reflecting turbulence in the markets because of fears that Greece might default on its debt. Even though the stock market rallied in Q1, trading volume was low as many investors, particularly individuals, decided to stay away. Revenue at its investment bank was $7.3B, compared with $8.2B last year, & fees fell 23% to $1.4B. The stock fell 72¢ on this mixed picture.
J P Morgan Chase & Co (JPM)
Even after yesterday's big gain, Dow is down 175 in a drab week. Expectations for earnings are not great & the reports will deliver less than inspiring results. Treasuries had a bad Q1 after an outstanding year in 2011. But they have been in favor in the last month. Gold, the other main safe haven investment, is not seeing a pickup in demand but that may be hurt by reduced buying from India. Markets are on defense & may have a tough period as earnings are reported.
Dow Industrials
Get your favorite symbols' Trend Analysis TODAY!
No comments:
Post a Comment