Your Monday Blip 7/14/20

Your Monday Blip 7/14/20

Stocks traded higher after a mixed opening. Yesterday’s reversal was due to a renewed lockdown in California where the governor announced that all bars will close but stocks today ticked back up thanks to earnings reports. The Dow ended the day higher by over 2% with a gain of 557 at 26,643. Trading volume was lower. IBD has markets in rally mode but yesterdays reversal on heavy trading volume was a yellow flag and bears watching.
Three big banks reported earnings today. JP Morgan reported better than expected numbers with a 4% revenue gain and a 47% drop in net income. The bank benefited from trading revenue, mortgage applications and fees associated with the PPP program. CEO Jamie Dimon said the company is in a good position with over $34 billion in loan loss reserves and $1.5 billion in liquidity. Meanwhile Citigroup reported better than expected numbers while Wells Fargo disappointed with a 25% revenue drop and a loss of $2.4 billion largely due to socking away $8.4 billion in loan loss reserves. Wells reduced its dividend by 80%.
Delta Airlines reported a massive loss and slashed flight plans as demand has gone flat. Revenue was down 88% and on a per share basis the company lost $4.33 after making over $6 per share this time last year. Delta has over $15 billion in liquidity and its daily cash burn rate is down to $27 million. The forward outlook is uglier than 10 miles of bad road with CEO Ed Bastian saying it will be two years before they expect to see a sustainable recovery.