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From Wall Street to Main Street

Highlights from the past week

Market / Macro Economic Summary

Markets are starting to develop quite the resiliency as they have weathered a higher-than-expected CPI (consumer price index) reading, the middle east war/conflict and continued Washington, DC political dysfunction.

We have started earnings season and the banks have given us a very strong start to the season (as expected).  Over the next month and a half, we will have heard from most of the largest companies in the U.S. markets.  For the most part, Wall Street is expecting earnings season to reverse the downward projections we’ve seen and start the process to grow quarter over quarter on a consistent basis.  This, in my opinion, is the reason investors and by default, the markets have held up as well as they have.  Participants anticipate this future positive growth and are afraid to miss out so therefore investors don’t sell despite some potentially bad news.  This is all good for my thesis that we should end the year on a more positive note.

Company Specific / Micro Economic Summary

JP Morgan Chase (JPM)

Shares rose 1.5% as the bank reported a blow out quarter.  Despite Jamie Dimon’s subdued and cautious outlook, the bank reported a top and bottom-line beat.  Earnings per share of $4.33 were better than the calls for $3.96.  Revenue climbed 21% to $40.69 billion was much stronger than the $39.63 billion analysts were looking for as well.  Jamie Dimon noted that the consumer is still spending but he fears if they are coming to an end of spending down savings and may cut back. 

Wells Fargo (WFC)

Shares rose 4.1% as the bank also reported a top and bottom-line beat.   Earnings per share of $1.48 were much stronger than the expectations of $1.24.  Revenue rose 7% from the same period a year ago to $20.86 billion and was also stronger than the Wall Street calls for $20.09 billion.  CEO Charlie Scharf said the bank is seeing declining loan balances and higher interest rates have added to the bank’s net interest margins.

Citi Group ( C )

Shares barely closed down .2% on the heels of a top and bottom-line beat to the quarter.  Earnings per share of $1.63 were much better than the $1.52 analysts were looking for.  Revenue of $20.14 billion were also ahead of the calls for $19.31 billion.  CEO Jane Fraser reported a strong 9% overall growth to revenue from the prior quarter as all five divisions came in stronger than expected. 

United Health Group (UNH)

Shares rose over 2% as the company reported a strong quarter.  Earnings per share rose 13% to $6.56 when Wall Street was looking for $6.33.  Revenues of $92.36 billion were 14% higher than the period a year ago and better than the calls for $91.4 billion.  Management also raised the guidance for revenue for the remainder of the year. 

Parting Thoughts

We welcome an opportunity to discuss the above detail and wish you much success in the rest of your week!



Erick J.  Palacios, MBA

Wealth/Fiduciary Advisor

Plan to Prosper Wealth Management’s clients & employees will from time-to-time hold securities mentioned above. Commentary is not endorsements or recommendations of any securities.