Top News on Jan. 16 that You Might Have Missed
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
What happened today, why does it matter, and what could it mean for the future? Here's my take on Wednesday's company-specific and broader industry news that could have long-lasting effects on your portfolio.
JPMorgan Trades Volatile But Posts Strong Quarter
After a volatile trading day, shares of JPMorgan Chase (NYSE: JPM) rallied higher by 1.01% after posting earnings where net profit surged 54%. The bank did slightly miss top-line expectations, but at the same time, delivered some encouraging news that the “London Whale” losses are beginning to wind down to just $300 million in Q1. Therefore, if the losses are subsiding it's possible that JPMorgan can continue to rally higher in the months to come.
Goldman Sachs Blows Estimates Out of the Water!
Goldman Sachs’ (NYSE: GS) Q4 earnings were near flawless on Wednesday, as its stock surged 4%. The company posted an EPS of $5.60, which beat expectations by an unprecedented $2.17, and then it also exceeded revenue expectations by $1.76 billion. The company’s investment banking revenue jumped 64% and its FICC revenue was up 50% year-over-year. Overall, it was a phenomenal quarter, and could be an indication of what’s to come for the industry.
European Car Sales Fall Lowest Level in 27 months
European new-car registrations fell 16.3% to 799,407 vehicles in December, the biggest decline since October 2010. Specifically, Ford and General Motors (NYSE: GM) fell 27% while Hyundai and Kia had strong showings. Both GM and Ford fell on Wednesday following the news, but shares of General Motors fell a massive 4.22% after the company guided for 2013 earnings and margins to be flat compared to 2012.
The fact of the matter is that auto sales remain strong in the U.S., yet weak in Europe. Earlier this week GM stated that it had no intentions of selling its European business. It will be interesting to see if this decision comes back to haunt the company.
More News on Boeing, Maybe the Worst Yet!
It seems that every day I am reporting something on Boeing, and yesterday I said that as various countries review the Dreamliner, it presents more of a risk of widespread problems for the company. On Wednesday, we might have seen the most significant problem, as a 787 Dreamliner had to make an emergency landing in Japan. This sparked a move where all 787s were forced to be landed in the country.
To put this in perspective, more than half of the 50 new Dreamliners Boeing has sold are in Japan, and all are grounded. The stock lost 3.38% of its value, and with nearly 800 Dreamliners on backlog, it will be interesting to see if any structural issues are found and if it affects orders for the plane.
Gun Stocks Rally After President Obama’s Speech
Gun companies have been volatile following harsh public perception and a demand to further regulate guns after several school shootings. President Obama made his address today, asking for a ban on assault rifles and a more tedious background check. As a result, gun stocks rallied, along with companies that benefit from gun sales, seeing as how a strong Q1 is expected and whispers continue to develop that the NRA will help to block pending regulation. This will be a story to closely follow, as most companies in the space have lost significant value in the last few months.
Dell Sinks as Reality Sinks In
Dell (NASDAQ: DELL) will most likely be acquired, but it won’t be easy, and there won’t be some huge premium paid for the company. However, the cost to acquire the company and the value that’s been created has supposedly already scared off TPG Capital, leaving Silver Lake as the sole suitor. If the deal is not complete then watch for significant selling pressure, as Dell has traded higher by more than 15% in the last three days due to the rumors and speculation.
Developments such as these ultimately dictate the direction of a stock, both short and long term. Therefore, it’s important that investors are aware of these developments and then, with additional due diligence, use the information to make an educated investment decision. With that being said, stay tuned to what may happen next.
BrianNichols has no position in any stocks mentioned. The Motley Fool recommends General Motors and Goldman Sachs. The Motley Fool owns shares of JPMorgan Chase & Co. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!