It’s Friday the 13th! Stocks closed out the week on a high note as consumer confidence gained new ground. The Dow closed up 30 points on heavy trading volume at 22,871. For the week the Dow was up about 100 points to 0.45% and is now up 15.2% for the year.
Trucking company JB Hunt reported worse than expected earnings as the company said it was negatively affected by hurricanes in Texas and Florida which were responsible for upwards of 5,500 missed loads. The company also said pay raises for drivers affected the bottom line which echo’s a theme I have been hearing from local truckers who indicate wages have increased about 30% over the past year. Revenue for the quarter was up 9% beating estimates while net income fell 6% and missed the guru “guestimates”.
Bank of America reported earnings and to quote Dennis the Menace….. They were “swell”. The bank posted a revenue gain of 5% and a jump in profits of 17% as strength across product lines coupled with lower charge offs and cost cutting drove ROE to 8.1%. BAC has purchased over $7 billion in stock off the market and increased its dividend by 50% this year. Capital ratios continue to rise and the deposit base moved up to $1,284 trillion smackers.
Wells Fargo posted Q3 numbers and it is plain that they are still grappling with the effects of the account scandal and Sen. Warren’s tongue lashing from a couple of weeks ago. Revenue was up 3% and net income only increased 1%. Wells Fargo trades at 1.37x book while Bank of America trades below book at .94x making BAC a cheaper stock. I always contend that the best way to upset a banker is to buy his bank for less than book value.