JP Morgan Q2 Earnings

Posted on | by Leon Hinde

JP Morgan posted a record $33.8 billion in second-quarter revenue and $4.69 billion in profit for the period.

The firm set aside $8.9 billion for expected loan defaults across its operations.

Jamie Dimon told analysts, If a relatively benign scenario emerges, JP Morgan will have too much capital saved and could resume stock buybacks as early as the fourth quarter. If a more severe recession happens, caused by a second wave of infections in the fall, the bank could be forced to cut its dividend.

Federal stimulus programs have supported individuals and small businesses in the second quarter, masking the true impact of the pandemic. It, therefore, seems reasonable to expect further deterioration in bad loan provisions.

A break below $90 in JPM will be seen as a loss of upside momentum.

Alumina – ATO Dispute

Posted on | by Leon Hinde

Alumina has run into issues with the Australian Tax Office following a review of transfer pricing arrangements with the AWAC JV.

The claim relates to a 20 year period and the ATO is claiming an additional tax of $200M plus interest. Other penalties may also be due and will be further communicated to the JV next month.

We forecast FY21 EBIT to increase to $350m, supporting a forward yield of 6%.

iShares Global Consumer Staples ETF

Posted on | by Leon Hinde

iShares Global Consumer Staples is under Algo Engine buy conditions and is a current holding in our iShares ETF model portfolio.

$74 is likely to act as support as we see a defensive rotation as market flows.

The fund aims to provide investors with the performance of the S&P Global 1200 Consumer Staples Sector Index TM, before fees and expenses. The index is designed to measure the performance of global consumer staples companies and may include large-mid or small-capitalization stocks.