BANK STOCKS POSTMORTEM
JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Co (NYSE:WFC), and Citigroup Inc (NYSE:C)
An overview of the JPMorgan Chase & Co., Wells Fargo & Co, and Citigroup Inc after reporting earnings Friday morning, July 14, 2017.
The Stock Market “FEAR” Factor
Can Cause Untold Chaos
This Bearish Attitude is Far From Perfect
In nearly every situation there are two sides to be considered, and it is no different for participants in the stock market. But, choosing the wrong side, and in this case, a bearish outlook, can be extremely costly considering that we are in one of the longest bull-rally’s in history.
As…….Stocks Will Continue to Soar!
Shortly after the major upset in 2008 subsided, the internet, emails, articles, videos, media headlines, television comments, etc., have bombarded the atmosphere with negative comments; “stock market crash imminent”, “a world of worry”, “recession signs”, warning on US economy, Global recession, “we are in a recession”, “free-fall”,” wages blasting higher”, “rising inflation”, “the Dow tumbles” and the list goes on.
If you had paid attention to these doomsayers information, and acted on it, then you would have indeed lost a lot of your profits/ and capital. This “fear material” has been detrimental to the well-being of a progressive stock market; but the good news is that the
bull-rally is still intact.
The S&P 500 and 2,500
Reaching the Elusive 2,500 Level!
Are we there yet……are we there yet…..are we there yet!!!
The S&P 500 Index (SPX) finally managed to break above the 2,400 level, but it took another month, due to the roller-coaster ride that ensued, before reaching the 2,450 mark. Since this time a range-bound situation has arisen, but it managed to reach 2,453 on June 19.
Even so, optimism continues to surround the U.S. equity markets; where year-to-date the S&P 500 index has climbed 7.6% on a price basis – which means there should be a 15% return or better for the year.
The S&P 500 is not greatly overvalued with the forward P/E currently sitting at 18.7; and with the earnings season starting next week in earnest, where a strong quarter is predicted due to positive earnings results – read “Earnings Season Ahead” – it is therefore, only a matter of time before the 2,500 mark is breached.
Earnings Season Ahead
The earnings season begins this week and will kick into a much higher gear next week. There will plenty of opportunities provided for trading perspectives before and after earnings as further information becomes available.
What to Look For and How to Play It!
The “Trump rally” provided for a strong Q1 earnings season; and now, some very favorable economic reports recently will help continue to drive stock prices up, yet again. Bear in mind that the market indexes are at an all-time high due to the extended bull rally; and the Q2 season occurs in the summer, where trading normally sees lower volume on earnings performance which may mute some price fluctuation when companies report earnings.
Even so, there is a strong market directly ahead, likely to be stoked by positive earnings results. While the second quarter estimate is lower, it still should be a strong quarter, and the 4th quarter in a row that shows positive earnings momentum.
Tech Stocks Continue Rally
Sector Not Over-valued!
Technology stocks have been having a tough time of it in the past few weeks, despite the fact that many of them are sound, providing excellent earnings results with incredible profitability and are providers of the future direction.
Even though tech stocks are, in the main, consistent out-performers, many hedge fund managers, investors and money managers see the tech sector as being over-valued and too expensive – alluding to a much ill-perceived idea that it resembles the 2000 dotcom bubble.
Many of the major tech names have suffered such as Microsoft, Apple, Facebook, Micron Technology, but Friday saw resurgence with the tech-laden Nasdaq Composite (COMP) moving higher on Friday, up 1.1% on the day.
Looking at some of the back-facts, internet stocks have historically outperformed in the third quarter - the First Trust Dow Jones Internet Index Fund (FDN) -- a fund that includes many FAANG stocks among its top holdings -- has averaged a third-quarter gain of
5.34% over the past 10 years, with 70% of the returns being positive.
Innovation of new technologies has accelerated at an enormous rate over the past few years; data shows that the tech sector is the foremost leader in 2017.
There are many factors that show that there will be further exceptional upside in the near future…..
Best of Trading,
Director of Stock Options Made Easy