April 25, 2024 | Daily JAM, Videos |
Today’s video is NOW I’m Worried About Stocks. Investors and analysts have shown a willingness to pay for vapor in the last couple of days. The market reaction to two companies, Tesla (TSLA) and Apple (AAPL), has made this clear me.. Tesla’s earnings were terrible at $0.45 a share, below the expectations of $0.52 and revenue was down 50% year over year. However, the stock was up the day after earnings thanks to expert spin from CEO Elon Musk. He announced that Tesla will move ahead with the Robotaxis and full self-driving cars but it will also advance plans to produce a $25,000 car to enter the lower end of the market and compete with China. Although the company previously waffled on offering a more affordable Tesla, Musk was now suggesting it may be available at the end of 2024 or early 2025. When asked for more specifics, Musk declined to offer a definitive date on any of these promises. Wall Street ate it up and jumped on the spin that Tesla will be selling a more affordable vehicle “soon.” At this point, these are totally imaginary revenues from a car that has no release date and a full self-driving technology that doesn’t fully exist yet, and investors are saying they’re willing to pay for it? What worries me here is that in the market paying for spin has become normal because stocks go up on spin. Even if the product is “vapor,” investors are willing to get in on the stock bump associated with the announcement of imagined prospects. Similarly, Bank of America recently predicted Apple (APPL) is going to go up 36% soon because the company will announce its plans for adding AI into the iPhone. This is speculation on an announcement, not of the product itself, but on the prospect of an announcement. Bank of America is likely right on this, but I’m not willing to pay up for this speculative announcement without a tangible product or date and it concerns me that the market IS willing to do that. I understand the spins and the anticipation but the reaction and willingness to buy on vapors isn’t a sign of a healthy market.
April 12, 2024 | Daily JAM, Mid Term |
All good things come to an end. After seven straight quarters of record levels of profits from net interest income, the spread between what earns by lending and what it pays depositors to raise funds, JPMorgan Chase (JPM) reported that net interest income slightly missed analyst estimates for the first quarter. The quarter the company reported today certainly wasn’t a disaster. The bank earned $23.1 billion in net interest income in the period, up 11% from the first quarter of 2023. But the end of the beat and raise guidance of the last year and a half plus an increase in costs were enough to lead to substantial selling today, April 12. The shares finished the day down 6.47% at $182.79. Analysts and investors were clearly hoping for more.
April 10, 2024 | Daily JAM, Morning Briefing |
If, as the too hot April 10 CPI inflation argues, we’re not going to see a June 12 interest rate cut… And if investors are looking at two cuts in 2024 (at the most) instead of three… And if there’s a possibility that we won’t see the first rate cut until the November 7 Fed meeting… Then what will keep this rally from turning into a correction? Earnings look like they will have to do the job .Problem is that this quarter’s earnings look likely to disappoint. There are quarters with better earning growth forecast ahead. Will investors wait for them?
April 7, 2024 | Daily JAM, Morning Briefing, Short Term |
This week I expect the market to put its obsession with the Federal Reserve, inflation, and interest rates on hold, and switch to watching earnings reports for the first quarter of 2024. The first batch of earnings–the Big Banks JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC)–hits the wires on Friday, April 12–with Netflix (NFLX) to begin tech/momentum earnings reports on Tuesday, April 18. I think it would be an overstatement to say that the quarter’s earnings reports are make or break for this rally–the economic news is just too strong and interest rate cuts loom out there somewhere even if no one can say just when. But this quarter will provide an important data point in the “Stocks have climbed too far, too fast” vs. “This rally can run higher on a strong economy” debate. And the first set of high-profile earnings looks likely to throw some cold water on the most fevered market optimists.
February 4, 2024 | Daily JAM, Morning Briefing |
I expect a relatively boring, week. With no fireworks from the Federal Reserve. Almost no economic data. No jobs surprises. And no earnings news from the Magnificent Sever stocks. Just old fashioned block and tackling to see if any other stocks can join the Momentum Parade.
January 13, 2024 | Daily JAM, Short Term |
Like every season of earnings reports, this one will be chock full of real earnings news and will come complete with strenuous efforts at gaming those real results. Three big questions for the week-and for earnings season. First, question: How much “bad news” has been already discounted by analyst cuts to earnings expectations?
January 9, 2024 | Daily JAM, Morning Briefing, Short Term |
Earnings season for the fourth quarter of 2023 begins on Friday, January 12 with reports from the big banks JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and Bank of America (BAC). Which means that earnings season is going start off with a dull thud. More than 70% of the Standard & Poor’s 500 companies that are scheduled to report earnings for the fourth quarter over the next few weeks are banks and the banking segment of the the financial sector in the index is projected by Wall Street analysts to show a 21% year over year decline in earnings
October 27, 2023 | AMZN, Daily JAM, INTC, Short Term, Top 50 Stocks, VIX, Volatility |
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October 13, 2023 | Daily JAM |
Maybe JPMorgan Chase (JPM) CEO Jamie Dimon felt his bank’s earnings report was so good that he had to pour a little cold water on investors. “This may be the most dangerous time the world has seen in decades,” Dimon said in a statement Friday. He also issued a caution about the records set in the third quarter. “These results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalize over time.” But the caution aside, it’s hard for me to find anything not to like in the big bank’s report.
October 8, 2023 | Daily JAM |
In my last post I wrote that the trend for the market is very uncertain at the moment and very dependent on news. This week will bring some of the news that will determine the market trend. Here’s a list in order of my sense of importance to the markets.
September 24, 2023 | Daily JAM, Mid Term |
The Standard & Poor’s 500 index (closing price) peaked on July 31 at 4588.96. The index is down 5.9% since then (as of the September 22 close.) That’s not correction territory (a drop of 10% ore more) but I’d say stocks can feel the hot breath of a correction on the back of their necks, The small-cap Russell 2000 Index has lost more than 11% from its July 31 closing high, roughly twice the decline in the S&P 500 Index over the same time. There are other signs of trouble in the stock market.
August 13, 2023 | Daily JAM, Jubak Picks, Millennial, Morning Briefing, PANW, Top 50 Stocks |
The key sentiment barometer I’m watching is Palo Alto Networks (PANW), down 13% in the last month on fears that Microsoft (MSFT) is going to gobble up the revenue growth in the cybersecurity space. I think that fear is overblown, at least when it comes to Palo Alto Networks. The stock has long been a favorite of growth stock investors and, if sentiment on market direction for the rest of 2023 is positive I’d expect strong buying in the shares ahead of the Friday, August 18, earnings report. The Wall Street consensus calls for the company to report earnings of 54 cents a share against 15 cents a share in the fiscal quarter a year ago.
