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.

Alexion – Buy Signal

Posted on | by Leon Hinde

NASDAQ listed Alexion Pharmaceuticals is now under Algo Engine buy conditions.

May 6, 2020-Alexion Pharmaceuticals announced first quarter 2020 revenues of 1.bn, (27% increase on the same time last year).

On a GAAP basis, diluted EPS in the quarter was $2.50, a 4 percent decrease versus the prior year.

Non-GAAP diluted EPS for the first quarter of 2020 was $3.22, a 35 percent increase versus the first quarter of 2019.

Nike – 38% Sales Decline

Posted on | by Leon Hinde

Nike reported a quarterly net loss and a sales decline of 38% year-over-year. 

Business operations were hurt from stores being shut temporarily, and online revenue was not enough to make up for that. 

Nike reported a loss of $790 million, or 51 cents per share during the period ended May 31, compared with net income of $989 million or earnings of 62 cents per share, a year ago. 

Total revenue was down 38% to $6.31 billion from $10.18 billion a year ago.

We remain on the short side of the Nike trade.

Nike – Sell

Posted on | by Leon Hinde

Nike is expected to report EPS of $0.18, down 70% from the prior quarter. Revenue down 20% to $8bn.

We see Nike as a shorting opportunity coming into the June quarter earnings result.

The above post was made on the 29th May and since then, the US market has pushed higher. With retail likely to fall short of earnings estimates, we remain cautious heading into next month’s earnings.

The below chart shows the updated price action in Nike, and of importance, the close below the momentum indicators.

US Markets

Posted on | by Leon Hinde

For regular readers of our blog and viewers of the Monday night webinars, you would be very familiar with the earnings table below.

The S&P500 index is trading at an assumed $170 of earnings per share for FY21 and $180 of EPS for FY22. We feel these targets are too optimistic and the range could be more like $125 to $150, with a slower rate of recovery into 2022.

The close on Thursday and Friday now has the major US indices trading below our short-term momentum indicators.

Our target for the S&P500 is 2500 support and 3300 resistance.

Berkshire Hathaway

Posted on | by Leon Hinde

Berkshire Hathaway is under Algo Engine buy conditions and is a current holding in our US S&P100 model portfolio.

We see the recent sell-off from $230 down to $160 as an opportunity for long term investors to accumulate the stock.

Investor Signals can establish a broking account for you to buy US stocks. We can advise and execute the orders on your behalf. For more information on our US broking account, please call 1300 614 002.

US Markets

Posted on | by Leon Hinde

A strong performance from Amex and ConocoPhillips overnight, both names are current holdings in our US managed fund.

We continue to watch the NASDAQ for a break below the current uptrend, at which time we’ll increase index hedging.