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Market recap: Stocks capped their worst week of the year on disappointing GDP growth from China...

Market recap: Stocks capped their worst week of the year on disappointing GDP growth from China and increased concern about Spain. Financials were hit especially hard, with BAC -5.3%, MS -5.2%; JPM -3.6%, WFC -3.5% despite solid "but not thesis changing" earnings. Crude oil prices eased; 10-year Treasury yields fell below 2%. NYSE losers topped winners four to one.
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Comments (11)
  • nafar
    , contributor
    Comments (239) | Send Message
     
    I just fail to understand why market is not appreciating GDP growth figure of 8.1% for Q1 2012 when sometime back the Chinese Govt lowered GDP target to 7.5%. The market then took into it this lowered GDP factor in.

     

    Inspite of good results from JPM, the price fell. I again fail to understand the EPS remained good inspite of huge provisioning for legal cases and Debit Valuation adjustment. If the bonds prices dips in days to come the DVA would be reversed and likely US$1.4B would add back to profit. Its probably a book entry as interest rate would not remain same for long. Further over US$ 25 billion of provisions exists for bad loans. Can anyone who has good views on this downfall can explain to me. Frankly I am a new entrant to this market.
    13 Apr 2012, 06:24 PM Reply Like
  • 2MuchDebt
    , contributor
    Comments (258) | Send Message
     
    First off 8% GDP growth sounds good. But growth for the sake of growth is not good. Quality of GDP matters too and China's quality of GDP is subpar. It's not the number itself that matters though, it's more about the number relative to expectations. Unfortunately your read on the market is incorrect. The market did not take into account the lower expectation. Remember the whisper of a rumor yesterday about 9%+ GDP growth in China and the market rallied strong? It's called Hopium (and manipulation) and there's plenty of it.

     

    About JPM: Earnings beat by $0.14/share. However, reduction in loan loss reserves, which is the traditional way for banks to pump up the bottom line, accounted for $1.8 billion of earnings or $0.28/share. The market doesn't like to see this because it is a transitory earnings component. The same is true for when earnings are lower due to increasing loan loss provisions. Also, NIM is lowest in over 3 years at 2.61%. And with Bernanke holding tight on interest rates, the yield curve probably won't be getting any steeper anytime soon.
    13 Apr 2012, 10:02 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2899) | Send Message
     
    Let me remind you that China's GDP growths in 2008Q4 and 2009Q1 were also "excellent" numbers.
    14 Apr 2012, 12:57 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9973) | Send Message
     
    nafar,
    So are you saying the 30+% increase from Oct/11 was somehow justified and that stock prices should just keep going up forever?

     

    What about Alcoa? AA reported a 66% decline in actual real earnings from Q1/11 to Q1/12 yet the market reported some great nonsense about AA beating absurd estimates instead of the real large decline in actual earnings. Yet AA went up, not down. Does that make sense? Do fundamentals really make any difference?

     

    The reality is that the markets are dominated by a tiny handful of large traders and they account for 70+% of daily market volume. Thus markets will move wherever they choose to move the market - whether it is up or down. That's what you are trading and investing against, a tiny handful of mega large traders.
    14 Apr 2012, 02:10 AM Reply Like
  • Rocky532ms
    , contributor
    Comments (17) | Send Message
     
    It is very simple, take the opportunity to buy at this type of down day. All fundamentals are good. If you are long term of investor.
    13 Apr 2012, 08:13 PM Reply Like
  • tahalb
    , contributor
    Comments (260) | Send Message
     
    these are all calculated tactics the big players play, so that they can steel as much money from the poor small time investor. How else would you think they can make more millions? They can not let the market just keep going up and up. They will loose! so, stay still, and watch the market as it goes up, design your entry and exit into any position depending on timming, and pay attention to the media. Take your profits no matter how small before the end of the day if you are a day trader, otherwise stay calm and ride the wave till a better selling opportunity comes. Know one thing, nothing stays the ame, if it goes yo, it will come down and vice versa.
    14 Apr 2012, 12:11 AM Reply Like
  • tahalb
    , contributor
    Comments (260) | Send Message
     
    i meant to sya, DO NOT PAY ATTENTION TO THE MEDIA,sorry!!
    14 Apr 2012, 12:12 AM Reply Like
  • Rocky532ms
    , contributor
    Comments (17) | Send Message
     
    Select stocks with high Growth earning and buy them in panic sale day. These stocks will move further next two years even European probem. Take profit on sharp rise and wait for drop on any bad news. Market will remain bullish in long term but short term it can move down also.
    14 Apr 2012, 01:09 AM Reply Like
  • SPEEDO1
    , contributor
    Comments (3) | Send Message
     
    Simple - Some times it is up; some times it is down. The old rule of thumb still applies. Buy Low, Sale High. Let the market work for you and don't try to fight it.
    14 Apr 2012, 04:45 AM Reply Like
  • nafar
    , contributor
    Comments (239) | Send Message
     
    Thank you every body of giving their insight in trading. I perhaps keep them as i foresee a good eps for the whole year. So long economy is moving in USA and BRICS countries everything wud be alright. Here for every little thing there is panic in the market. Soon i wud understand. Thank u every body
    14 Apr 2012, 07:58 AM Reply Like
  • onewhatsbeendonebefore
    , contributor
    Comments (145) | Send Message
     
    Try a strangle of 3 months on LNG it works like a money fountain for me.
    14 Apr 2012, 02:46 PM Reply Like
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