Investment reports

Weighing portfolio risk amid dodgy reports

Source: Bro Crock /

It was another volatile week on Wall Street with unexpected earnings results contributing to the ups and downs.

Profits can turn the market around in hours, that’s what we’ve seen this week. As we analyze the results, keep in mind that it’s critical to pay attention to these reports…but keeping a cool head is how savvy investors will benefit from this environment.

Wednesday’s CPI report was higher than expected – prices rose 9.1% from the same month last year and month-on-month inflation was up 1 .3%. These figures include food and energy prices, which, if excluded, means that so-called “core” inflation rose only 0.7% from last month.

We wouldn’t normally place too much emphasis on core inflation numbers, but for now, this is the most relevant number to watch. Food and energy prices tend to fluctuate rapidly – ​​we see in real time that gasoline prices are falling from historic highs – so excluding them gives us a more consistent number.

We covered the impact of the CPI report on the stock market in our Learning Markets Live Stream Wednesday evening. If you want more information on how the S&P survived and the impact it could have on your portfolio, Click here.

Whichever number matters most, this week’s inflation report shouldn’t move the market much. Traders have been waiting for earnings reports to come out, and it started on Thursday…

Tank & Triumph Banks

We were much more optimistic about early earnings reports this week from banks like JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MRS).

Expectations were low, but fixed income (bond) market volatility was high – good for banks. Volatility leads to commissions and fees. Additionally, positive investor sentiment boosted by good news in this sector could push the S&P back above resistance.

However… JPMorgan’s stock fell nearly 4.3% after reporting lackluster results on Thursday. The bank fell short of expectations – profits fell 28%, likely due to higher reserves for bad debts and the halting of its share buybacks. We have more information on JPM loan losses and other topics in this fast live streaming on our YouTube channel.

Morgan Stanley’s results were hurt by a staggering 55% drop in investment banking revenue, and profits fell 29%. Shares fell 1.4% after the news broke. Get more details about MS in the live short film we recorded on Thursday.

Wells Fargo (NYSE:WFC) and Citigroup (NYSE:VS), on the other hand, helped give the market a much-needed boost this morning. WFC rose 2.8% even as earnings fell slightly, and C posted a jump of 5.2%, beating estimates as it benefited from a rising rate environment.

We await earnings reports from other banks next week, but the only consolation at this stage is that lower bank revenues will weigh on interest rates and inflation – which, therefore, could lower expectations. regarding Fed rate hikes later this year.

Our plan remains to focus on earnings and add risk to the portfolio only when we have a better idea of ​​earnings progression.

Short on time, long on stock information

Lately, we’ve been breaking up our usual hour-long livestreams into quick, easy-to-digest shorts, like the ones we’ve done for JPM and MS.

Here are some other must-have topics we covered this week in about 10 minutes each…

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