Market Wrap-Up for Mar.15 (AXP, WFC, JPM, CL, FCX, more)
Today Wall Street was focusing on the results of the banking stress test results released after the bell yesterday.
For the most part, the reaction had been a positive. Investors were cheering announcements from some banks that will be making dividend increases and share buybacks. Some of the better investor reactions we had were in shares of Wells Fargo (WFC), Discover Financial Services (DFS), and American Express (AXP). On the flip side, we had a not-so-good reaction for shares of JP Morgan (JPM) (more on that firm below) and SunTrust Banks (STI).
Elsewhere, earnings results and guidance had shares of Carnival Corp (CCL) finishing in the red. The cruise ship giant was in the news just this week again as passengers reported trouble aboard another of the company’s ships. Wall Street analyst calls also played a part in today’s action, with shares of Colgate-Palmolive (CL) and J.B. Hunt (JBHT) lower, while one analyst was positive on commodity giant Freeport McMoran (FCX).
Let Others Swing for the Fences
We’re seeing lots of buzz surrounding news out this morning that we have cowboys in the Wall Street systems (no surprise there). Of course, I’m referring to the news out that J.P. Morgan (JPM) tried to hide billions of dollars in trading losses. Sadly, the scare we experienced with financial institutions back in 2008/09 was forgotten fairly quickly. Unfortunately, it’s just the way the system works.
When you swing big and put others in jeopardy, the chances of getting help seem to rise when it comes to Wall Street and Washington. It wasn’t the case for Lehman Brothers or Bear Stearns for whatever reason, but this morning’s news on JP Morgan is hugely disappointing.
When it comes to the “little guy,” the rules of swinging for the fences don’t apply. So for anyone thinking they can mirror the mistakes of the powerful Wall Street forces, bear in the mind the results will be disastrous in most cases. One thing you can say about legendary investor Warren Buffett, he’s never been reckless in his investing — despite having access to almost unlimited leverage. Instead, he waits for the cowboys to make their play (and eventual demise), and then comes in to pick up the best pieces that may be left. He didn’t do that with HJ Heinz (HNZ), which he bought at all-time highs, but he had been nibbling on various housing-related plays before the recent real estate rebound.
When it comes to making money, there will always be many who will overstep and get carried away with the euphoria of the day. Patience and discipline will be your best friend in times like that. Don’t ever forget it!
Looking Toward Next Week
Looking ahead to the next week for stocks, we continue to see the number of earnings releases for the quarter wind down. Some of the companies reporting next week include General Mills (GIS), Nike (NKE), Oracle (ORCL), and Tiffany & Co. (TIF).
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