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Stock market commentary for April 14, 2020

US stock market

A stock market rally today for the first hour of the trading session. At 10:20 AM
Tuesday, April 14, 2020, Eastern Time (ET) the US stock market is up:

S&P 500: 2,842.52,+80.89(+2.93%)
Dow 30: 24,027.32,+636.55(+2.72%)
Nasdaq: 8,470.90,+278.47(+3.40%)
Russell 2000: 1,246.96,+34.92(+2.88%)

US stock market earnings season has started, results are supposed to be very bad, yet stocks rally

This is not justified from a fundamental analysis.

JPMorgan warns of ‘fairly severe recession,’ increases credit reserves by $6.8 billion

“JPMorgan Chase (JPM), the largest U.S. bank by assets, kicked off earnings season for the big banks on Tuesday by announcing that it set aside billions in anticipation of loan losses.

“In the first quarter, the underlying results of the company were extremely good, however given the likelihood of a fairly severe recession, it was necessary to build credit reserves of $6.8B, resulting in total credit costs of $8.3B for the quarter,” CEO Jamie Dimon said in his commentary.

Here were the key figures versus the expectations for the first quarter, according to analysts polled by Bloomberg.

Revenue (adjusted): $29.07 billion vs $29.52 billion expected

Earnings per share (adjusted): $0.78 vs $2.14 per share expected

The market isn’t putting much weight into how the actual results performed against analysts’ expectations as the impact of coronavirus pandemic has been extremely difficult to measure. To be sure, a key reason EPS was much lower than a year ago is because of the bank building its credit reserves.”

At 10:25 AM today JPMorgan Chase & Co. (JPM) stock price it at 97.29-0.90 (-0.92%).

Wells Fargo (WFC) stock news

“(Bloomberg) — Wells Fargo & Co.’s credit costs surged in the first quarter, previewing a tough year at the helm for new Chief Executive Officer Charlie Scharf as the coronavirus pandemic brings the U.S. economy to a virtual standstill.

The firm set aside $4 billion in loan-loss provisions in the first quarter, almost five times what it allocated a year ago and the most in a decade. That contributed to an 89% drop in net income. “

Source: https://finance.yahoo.com/news/wells-fargo-sets-aside-most-122957001.html

Stock market news

For now poor or bad economic news and economic outlook, as we are in the earnings season seem to be ignored by investors. This does not make sense. But we have to wait for more companies to release their quarterly earnings to get a more precise picture of the coronavirus effects on the earnings.

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