JPMorgan's Good and Bad News

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

Stock futures indicated a slightly lower open this morning after the S&P and Dow closed at new 52-week highs yesterday. Futures dipped a little following JPMorgan’s earnings report, and remained lower as the dollar rises to the highs of the week in early trading. On the dollar strength, trading lower this morning are commodity stocks, which are down about 2-3 percent pre-open on lower commodities prices.

Despite the small losses expected this morning, the markets are on pace to finish the week in positive territory for its 3rd weekly gain in the past 4 weeks.

In focus today is JPMorgan Chase , which fell some 1 percent pre-open despite topping earnings estimates ($0.74 vs. $0.61 consensus). Revenue fell slight short of the Street’s expectations, however ($25.2 billion vs. $26.8 billion consensus).

Good news: strong investment banking helped fuel Q4 profits, as the division saw $1.9 billion in profits (compared to a $2.36 billion loss last year).

Bad news: commercial banking and mortgage loan loss reserves continued to rise in the quarter. Still, the uncertainty over further losses continues to weigh, as the bank’s CFO cautions there is a “limited degree of visibility” in assessing future credit card losses. Looking ahead, he currently expects about $1 billion in credit card losses in the first and second quarters of the year.

Most other financials traded slightly lower pre-open following JPMorgan’s report.


1) Mixed bag of news out of credit card issuer Capital One today. December credit card delinquencies fell 0.09 percentage points after rising for 6 consecutive months. However, charge-offs, or loans that it no longer believes it can collect, continued to rise — crossing above the 10 percent mark in December.

2) Intel fell fractionally despite strong Q4 results. Earnings and revenue came in well above Street expectations, while gross margins rose to a record 65 percent. Helping the chipmaker’s results was a sequential rise in average selling prices as PC shipments rebounded.

Another good sign for the tech giant: Q1 margins will continue to be higher than Street estimates, while expected Q1 revenues of $10.6 billion are also above the consensus forecast of $10.2 billion.

3) CF Industries announced it was withdrawing its bid to acquire fertilizer competitor Terra Industries . The decision comes as CF believes a significantly higher bid would be required to seal the deal, now that Terra’s share price has surged over the past year. In pre-market trading, Terra falls 5 percent, while CF jumps 7 percent.

CF will now attempt to fend off a takeover bid by Agrium , which has submitted a long-standing $5 billion hostile bid for CF.




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