Gloomy Econ Data Outweighs JPMorgan Cheer

S&P 500 futures dropped about 5 points as the NY Fed Empire Manufacturing Index came in below expectations, PPI showed greater deflationary pressure than expected, and while initial jobless claims were lower than expectat ions continuing claims were higher than expected.

JPMorgan reported earnings of $1.09, solidly above consensus of $0.70. Credit improvement was the key: more release from loan loss reserves ($0.36!), delinquencies declined, and charge-offs declined 28 percent.

CEO Jamie Dimon said, "although we are gratified to see consumer-lending net charge offs and delinquencies decline, they remain at extremely high levels and therefore returns in our consumer-lending businesses are still unacceptable."

As expected, trading revenue declined, but perhaps not as much as some feared. Fixed income, currency and commodities (FICC) were down 35 percent sequentially, equity trading down 29 percent, investment banking fees were little changed.

Watch how this stock trades today. Shorts covered going into the 4th of July weekend, stock is up almost 14 percent since the start of the quarter. Given that runup, it's not clear that longs are looking to dive in further.


1) China's GDP growth moderated in the second quarter, to 10.3 percent year-over-year from 11.9 percent in Q1. The Shanghai Index was down 1.8 percent.

2) Marriott beats estimates ($0.31 vs. $0.29 consensus) thanks to improving hotel rates and higher occupancy. RevPAR (revenues per available room) rose 9.9 percent - ahead of the company's prior forecast - after room rates in North America rose for the first time in 2 years. While hotels have recently seen improved business travel, Marriott also noted that leisure travel is "trending up."

Although the company raises full-year guidance to $1.05-$1.15 (above $1.04 consensus) as pricing remains "favorable," it remains cautious on the third quarter ($0.18-$0.22 vs. $0.22 consensus). RevPAR in the current quarter is expected to grow a modest 6 percent-8 percent.

3) Following Intel's record report on Tuesday, Fairchild Semiconductor (FCS) rises 5 percent after far exceeding Q2 earnings estimates ($0.40 vs. $0.31 consensus) on a 47 percent surge in revenues (better-than-expected) and higher margins. The chipmaker noted particular strength in industrial sales and in consumer & handset orders.

Revenue guidance for the current quarter comes in comfortably ahead of Street expectations ($415 million-$425 million vs. $412 million).

4) SMART Technologies (SMT) becomes this year's biggest US IPO, raising $660 million. The Canadian interactive blackboard maker priced 38.8 million shares (over 3 million more than expected) at $17 per share (middle of $16-$18 expected range). The firm will begin trading today on the NASDAQ.

5) Take 3: Movie theater chain AMC Entertainment filed for a $450 million IPO. No pricing or timeframe for the listing was given, but it is the third time the company has attempted to go public. AMC filed for a bigger IPO back in 2006 ($750 million) and in 2007 ($500 million), but eventually pulled each offer.

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