Intraday Market Update
US equities are flying high after solid gains in overseas markets and strong earnings results from Dow members JP Morgan and Intel, while an earnings beat from CSX is helping boost the transportation sector and overall market sentiment. However, shares of the JPM and INTC are in the red after gapping higher at the open. Transportation, miners, and oil services are leading the way higher, while banks and semiconductor's are lagging. All of the major indexes are posting better than +1% gains across the board. Commodities are also higher with gold surging to another all-time high near $1,375 an ounce, front month crude has gained +1.40% as it consolidates near two month highs, silver is trading at multi decade highs, and copper is approaching pre-recessionary highs last seen in June/July 2008. Volatility continues collapsing with the VIX trading to lows not seen since the April highs as traders see no fear in the US equity market. Overseas, solid advances were seen across the Asia-Pacific region, while European markets closed in the neighborhood of +1.50% to +2.00% higher after a stronger than expected rise in euro zone industrial production.
Before the bell JP Morgan announced Q3 earnings of $1.01 per share which was well above estimates calling for $0.90. However, revenues missed estimates and declined -15.4% compared to last year. The company said although revenue declined in its investment banking unit, it still posted solid earnings. The company's commercial banking unit recorded record revenue, and its asset management unit has strong net asset inflows. JPM said their net charge-offs and delinquencies in its card services unit continued to improve and it reduced its loan loss reserves by -$1.5 billion. CEO Janie Dimon said he expects charge offs to further improve next quarter, and also insisted that the emerging foreclosure scandal would have only an "incremental" impact on earnings. After gapping higher at the open JPM is down nearly -1%.
Meanwhile, Intel gapped higher right up to its primary downtrend line and has lost -1.50%, despite a report that was basically in line with estimates. CSX has gained more than +4% after beating earnings and posting revenue that was in line with estimates. The company said their freight volume growth remains in double digit territory and that their business has remained robust in a quarter that is usually seasonally slow. Chevron (CVX) has recovered from its lows to flat after the company warned yesterday that Q3 earnings are expected to be lower than last quarter due to the weakening US dollar which is forecasted to reduce earnings by about $400 million.
Core Sector List:
Overall reading: 20 sectors advancing, 0 sectors declining
Strongest Sectors: Transportation, Miners, Oil Services, Software
Weakest Sectors: Banks, Semiconductors
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