Dow 12,777 (+1.62%) S&P 1,357 (+1.65%)
All bad things must come to an end. After 6-straight painful days, markets were rallied straight up like John Travolta’s Pulp Fiction epi-pen slamming into Uma Thurman’s dying chest. Impressive quarterly earnings from banks Wells Fargo and especially JPMorgan Chase were more than enough to move the markets, also pulling up Bank of America and Citigroup. The Reuters/University of Michigan preliminary “Consumer Confidence” poll for July dipped to its lowest level of ’12 so far and ratings agency Moody’s did the downgrade dance and dropped the ratings of Italian government bonds. But the huge momentum courtesy of financial stocks lifted the Dow up 204 points.
JPMorgan 2nd quarter profit propels shares up
Eat thy words, JPMorgan (JPM) doubters…or CEO Jamie Dimon will make you swallow their $5B cash profits from last quarter from his cold, bare hands. The giant investment bank rallied almost 6% after reporting the huge profit for the quarter (although down slightly compared to last year). Keep strongly in mind that this impressive performance was accomplished despite the mega “White Whale” trading loss in May – which JPM also estimated today ballooned from $2B to over $4B. On top of all this, Dimon predicted to reporters this afternoon that 2012 will be the bank’s most profitable year ever. Whatever’s served in those JPM company cafeterias sounds like it was prepared by Barry Bonds’ trainer and we’re ok with that.
Euro hits 2-year low vs. dollar
With Spain’s victory over Italy in the EuroCup finals, we thought we’d seen the end of metrosexual athletes wailing in agonizing pain on the turf after a rogue pinky hit another player’s thigh. But the euro currency continues to plunge after the soccer tournament. The value of the euro hit a 2-year low today – it now costs just $1.21 – due to very weak European economies & governments on the brink of bankruptcy. Nobody wants to invest in Europe, causing demand for the euro to tumble and the value to dive. Now will Americans increase purchases of Europe’s fancy exports (clothing, cheese, non-contact sports, etc.) that are suddenly cheaper than ever for us?
China’s GDP expansion slows again
China announced its GDP last quarter expanded at a 7.6% pace, less than the 8.1% gain of the previous quarter and economists’ expectations of 7.7%. This 2-year low is the 6th straight quarter that Chinese economic growth has slowed – its weakest pace since the global finance crisis began in 2008. The 7.6% growth is still impressive by global standards (the US by comparison is happy with 2-3% right now) and investors pay attention to China’s numbers because the manufacturing powerhouse has such an influence on and is such a reflection of global consumption.
- Monster earnings week for the second quarter: Google, Goldman Sachs, Microsoft, Bank of America…and many more
- Federal Reserve Chairman Ben Bernanke speaks before Congress to give his outlook on the economy
© 2012 MarketSnacks