With more and more major firms reporting impressive returns for the second quarter of 2010, it looks like there is more to expect in the days to come from other companies. With the release of JPMorgan Chase and Google Inc.’s earnings for the second quarter, Wall Street investors are looking forward to happier days ahead if the impressive earnings posted by world major companies recently are anything to go by.
Expected Reaction of Markets to JP Morgan Earnings Report
With the release of JP Morgan Chase’s second quarter earnings, it is expected that the figures will be influential in the markets. However, seeing as it is that the bank has posted disappointing results in the past, wall street investors will be keen to see if JP Morgan’s posting reflect a gradual resurrection from the slumber the banking sector experienced in the recent past in the face of the global financial meltdown.
As such, there are two things to watch out for with the JP Morgan report, chiefly trading and credit card losses. It is a known fact that even with the tough times that have characterized the first quarter of this year, most Wall Street firms have remained afloat with impressive performance indexes thanks to their volumes. In that regard, JP Morgan may surprise general expectations by reporting better results given the fact that it is currently the second biggest banking institution globally.
Most Wall Street investors speculate that the capital markets postings will be weak in the second quarter given the effects of the weak trading and investment banking results. However, some analysts are hopeful that JP Morgan will take advantage of this year’s drawdown in the face of the slowing burgeon in problem assets and robust reserve levels that are expected to reinforce the banks capacity to attain a normalized earnings ahead of its rivals in the banking Industry.
Expected Eranings Figures
With that in mind, most analysts expect the banks earnings in the second quarter of this year to peak at around a profit of 71 cents for each share on 25.59 billion dollars. JP Morgan had a profit of 28 cents for every share on net income of 2.7 billion dollars in last year’s second quarter. According to Thomson Reuters analysts, had estimated profits pegged at the 71 cents per share of the 25.59 billion dollar shares; with its reputation in the financial services sector, its estimates are general taken as an aptitude test for the whole financial services sector. As such, the stock market offers one of the most preferred parameters that can provide hints on heavy earnings seasons. Recently, equities have grown for the last seven sessions consecutively and mainly from quality earnings postings.
Thus if Google Inc and JP Morgan Chase can post impressive figures in earnings that beat projected results, then the Dow at almost breakeven point can hope to attain an even better mark. On the other hand, if one of the two companies does not post better reports, then there could be a rapid sell off of shares as equity traders rush for the short term gains.