DOW – 5 = 16,315
SPX + 2 = 1877
NAS + 13 = 4227
10 YR YLD – .08 = 2.20%
OIL – 3.76 = 81.98
GOLD – 4.90 = 1233.20
SILV – .11 = 17.49
The Dow was down slightly, while the S&P and Nasdaq snapped a 3 day slide, but this was almost a quiet day; call it neutral. A follow-up on yesterday’s discussion of the 200 day moving average. The S&P 500 dropped down to the 200 day moving average on Friday (right around 1905), and then fell right through the trend line yesterday. We talked about the possibility of a bounce; and I don’t think today’s minor move qualifies as a bounce, even though it was a positive move. So, we are still waiting for a possible bounce. The 200 day moving average is a lagging indicator, and so for now, the trend line is still moving higher; which increases the prospects for a bounce. When the price drops below a declining 200 day moving average, it is considered extremely bearish and the probability of a bounce is very low. So, we wait for confirmation.
It is earnings reporting season, and today’s reports feature the banks. We start with JPMorgan Chase, the nation’s largest bank by assets, reporting third quarter net income of $5.6 billion, or $1.36 per share, a big improvement from the same period last year, when the bank’s legal bills caused it to lose $380 million. JPMorgan Chase missed profit expectations of $1.38 per share, but the bank beat revenue expectations by reporting third-quarter revenue of $25.1 billion, as opposed to estimates of $24 billion.
CEO Jamie Dimon talked about the cyber threat, saying there is a need for greater coordination between banks and the government, and also saying, “It’s going to be an ongoing battle, and unfortunately battles will be lost.†Indeed, the mere act of reporting earnings is an example of a lost battle. JPMorgan Chase’s earnings release was posted earlier than scheduled this morning on the Internet site that hosts the bank’s earnings documents. Oops.
And a side note on cyberattacks; a hacker claims to have stolen 7 million usernames and passwords for Dropbox, the cloud based file storage and sharing service. Dropbox says their servers have not been hacked, but you might want to change your passwords. I’m just saying.
Wells Fargo, the nation’s largest bank by market capitalization, reported net income of $5.7 billion, compared with year-earlier profit of $5.5 billion. Per-share earnings were $1.02 versus 99 cents a year earlier. The quarter marked the 17th consecutive period of year-over-year profit growth. Earnings matched estimates. Revenue increased 3.6% to $21.2 billion.
Wells Fargo, the country’s No. 1 mortgage originator, said it made $48 billion in new home loans in the third quarter, up slightly from the prior quarter, and down 40% from the year-earlier period. Meanwhile, JPMorgan Chase, the second-largest mortgage lender, said its third-quarter originations hit $21 billion, up from $17 billion in the second quarter, and down 48% from a year earlier.
