Stocks today continued the recent breakout with the Dow gaining 134 points to 18,506 on heavy trading volume. IBD has stocks firmly in rally mode following last weeks move to new highs.
JP Morgan reported earnings and the big bank wowed the gurus with a 5% revenue gain and a 1% increase in net income. Core loan growth was a solid 16% YOY and a tight lid on expenses helped offset the deleterious effect of historic low interest rates. Deposits were up 10% and the bank’s tangible book value grew 9%. JP Morgan passed the stress test at the end of June and as a result announced a $10.6 billion share buyback program. The company also projects a reserve build as a result of the uncertainty over possible Brexit issues and a small exposure to a potential Italian bank crisis.
Alcoa Aluminum reported earnings last Tuesday and while the numbers were lower than the prior year they still beat estimates. Revenue was off 10% and net income was mostly stable. Aluminum prices were lower by 15% but management said that when prices do rebound the company should see a massive profit jump due to cost cutting measures that have been put in place. Alcoa is seeing near term weakness in demand for aircraft aluminum and is facing an influx of cheap Chinese aluminum.
Gold prices pulled back as the new British gubment gets settled into 10 Downing St in what was the fastest change of leadership in modern history. Gold fell $9.70 an ounce to close at $1,333. The Bank of England held rates steady but stands by to infuse cash into the system if needed. Meanwhile brokerage firm Jeffries & Co. upgraded its ratings on several gold mining stocks.
Oil closed up 1.6% to $45.47 per barrel. The US dollar fell against the British Pound after the BOE action. US oil demand is off a bit despite this being the heart of the summer driving season. It must be all those self-driving Tesla’s floating around not using any gas.