RANDOM TPC THOUGHT: LOTS OF BULLISH CATALYSTS?
As the can’t lose market continues to power higher I just can’t help but think about some of the catalysts that lie in our path over the next 24 hours. Investors have been front running the current earnings season with very bullish expectations and the next 24 hours could prove them right as Intel and JP Morgan are set to report. In addition, the commerce department is set to release their monthly retail sales report tomorrow and current low expectations could add fuel to the bullish fire.
There have been rumors for well over a month that Intel is going to report a strong quarter. On March 16th the stock spiked 4% as investors began front running what is expected to be a “better than expected” quarter. Intel is a notorious sandbagger. Analyst’s estimates are pegged almost exactly where the company said they would come in so a “better than expected” quarter is practically a guarantee.
Rumors have been swirling about JP Morgan for several weeks as well. On March 31st Goldman Sachs issued a note telling clients to buy call options on JPM and Bank of America. They said:
“Our analysts are bullish on JPMorgan and Bank of America and believe upcoming earnings could be catalysts for shares. Our analysts see the potential for higher earnings day volatility than is priced into options on these stocks and we expect these options to carry well over the next few weeks.”
Shares of JPM have rallied over 10% in the last month. Whether all of this is priced into the market is yet to be seen. It’s difficult to imagine that it hasn’t been priced in yet as banks have rallied 24% in just 8 weeks and the S&P has rallied almost 16% over the same period, but this market has a very strong underlying bid and any positive catalyst could give the bulls further reason to pile on.
Update: Bernanke also speaks tomorrow and we all know his mantra: “We will never raise rates again in the history of banking therefore I will continue to punish savers and herd investors into risk assets”. I.e., buy stocks.
Never raising iterest rates…that did wonders for Japan lost decade, err lost two decades.
wow, intc Q1 ’10 blow out! almost as good as last quarter, which never happens due to use it or lose it budgeting of buyers
owning semis into this report was a no brainer. I don’t think there is a person on the planet who didn’t know they would beat….Q1 earnings are setting up exactly like last quarter….
i wasn’t expecting this good of a quarter, with margins so strong; usually 1q margins are not this good.
now let’s see how jpm does…
It’s a great quarter. I actually think the CSX Q1 is more telling of the economy though.
Intel’s margins at 68%. Some say this is as good as it gets.
One has to wonder:
1) How much better can the news get?
2) Who doesn’t know this earnings season is going to be good?
I’ve been talking about a great Q1 since the beginning of the year and for some reason everyone is shocked when the earnings are good. I’ve laid out some simple math. It blows my mind that the analysts can be so wrong so consistently. And who are the investors that fall for these “better than expected” quarters? I continue to think the big boys will be sellers of this news, but we’ll have to wait and see.
these are not normal times…even big boys need confirmation from the market to be long, that the recovery will become an expansion…so i think good news is good news right now, especially if/when ben says steady as she goes