Mizuho was one of many firms that came out overnight projecting that China would bottom in the first quarter...they are sticking by forecasts of 8.6 percent GDP growth in 2012.
China’s Shanghai Index went up 0.4 percent on speculation China would get even more aggressive in loosening monetary policy.
The main worry for China: slow exports. The downturn in the euro zone is a major problem, so much of China's GDP predictions depend on what side of the euro recession story you are on: mild, with a rebound by the fourth quarter, or more severe, with the euro zone remaining in recession well into 2013?
1) JPMorgan Chase and Wells Fargo beat on the top-line and bottom-line: It’s about expanding the mortgage business.
JP Morgan slips 0.7 percent pre-open after reporting better-then-expected first-quarter earnings of $1.31 a share, compared to analysts’ $1.18 a share consensus. As expected, the key was trading, with trading in fixed income, currency, and commodities down 4 percent year-over-year, better than the roughly 10 percent decline many were expecting, while equities trading rose 1 percent.
Wells Fargo dips 1.4 percent after slightly edging out the Street’s first-quarter estimates. The nation’s fourth biggest bank reported first-quarter earnings per share of $0.75, versus analysts’ $0.73 estimate. Much of the upside was from mortgage banking, much of that in the form of refinancings.
Here’s a startling fact: Wells Fargo is the largest mortgage originator in the U.S., with about one-third of the market. The other major players are Bank of America and Citigroup, both with roughly 10 percent. Combined, those three banks have 50 percent of the mortgage market.
A couple sidebars:
a) better mortgage business seems to be good for the mortgage-servicing names (Lender Processing Services; Ocwen Financial, PHH Corp., Altisource Portfolio Solutions, and Walter Investment Management); and