What’s the reason du jour? Is it China not as slow? $JPM not as bad? $WFC posting record numbers? Or is this just a Friday relief bounce and profit taking after 6 consecutive down days in the market? One thing I like to keep in mind is that the best days in the market tend to happen in down trends, while the worst days in the market happen in up trends.
Anyway, I don’t want to be a sour puss. It’s nice to see a market rally. Even if I’m in cash and low beta stuff. Heck, the utilities are up, too. A rising tide lifts all boats, and you’ll need energy to run the sump pumps.
China’s 2nd quarter GDP came in at 7.6%, and the thought is that while it’s slower than people want, there is credibility behind the numbers. I don’t know about you, but government numbers from China, or the US these days, don’t seem to be as trustworthy as we’d all like, right? But wouldn’t the US like a 7.6% growth rate? Imagine what that kind of number would do to the bond market. (That’s something to keep in mind, by the way).
JP Morgan did a bad, bad thing, but the stock is up a couple of bucks. The company reported $1.21 per share, when analysts were expecting 76-cents. That’s a beat. The bad trade cost the bank $5.8 billion this year – that’s 3-times the original estimate, speaking of trustworthy reporting. Jamie Dimon says that the company believes it was an “isolated event.”
Meanwhile, Wells Fargo posted record net income, and they beat estimates by a penny. The stock is up over 3% as I type.
In the “move along, nothing to see here” department, three California cities have recently declared bankruptcy. Is it the tip of the iceberg? Getting the blame for the BK’s is falling property values. I’d add that the government got caught in 1999-2000 expecting 20% gains in the stock market forever, and caught in 2005 expecting 20% gains in property values forever. Government at all levels started basing their spending plans on higher streams of tax revenues.
Hey, what did I say about trends never changing? Apparently, they do! They do change!
***
Okay, Dodgers (aka the Blue Team) start their second half today. I’m ready. Hope they are!
Off to the CA state fair – after walking the puppy. It’s not going to be 105 degrees today!