Finance and Markets -

JP Morgan For JP Morgan Q3 financial result was a mixed bag. Investment bank and retail banking helped the bank report an increase in third-quarter profit. The bank’s Card Services and Consumer Lending segments however had a bad phase with the credit costs continuing to be high. The bank has proved to be one of the best banks to weather the current crisis. In June the bank paid back the entire $25 billion assistance it had received under TARP. Third quarter net earnings of the bank increased to $3.59 billion from $527 million last year. Net revenue for the quarter increased by 81% to $26.62 billion from $14.74 billion in the corresponding period last year. As expected the credit losses for the quarter increased by 40% to $8.1 billion from $5.8 billion last year. Segment wise Investment Banking unit had the best performance with revenue increasing by 85% to $7.5 billion. The unit  [...]

Last month four of the US banking giants announced their third quarter financial results. With the banking sector in doldrums, every quarterly result announcement is being awaited for some good news and being scrutinized by analyst like never before. All these four banks were among the biggest recipients of payouts from government. Lets analyse their financial statements to understand what they did right and what went wrong. Gold Man Sachs A year after receiving government aid, Goldman Sachs Group had an impressive third quarter with profits of $3.19 billion , or $5.25 a share up from $845 million, or $1.81 a share, a year earlier. Overall the bank doubled its revenue to $12.4 billion from $6.04 billion last year. In spite of having a record level of capital the firm managed an impressive return on equity of 21.4% compared with 7.7 percent in the third quarter of 2008. Segment wise the  [...]

Finally some good news for US dollar. After hitting 25-month low on Monday the dollar rebounded on Tuesday and registered an increase against major currencies. However the currency still remains weak as investors expect interest rates to remain low. The dollar index which measures dollar’s performance against six major currencies increased by 0.2% to 75.18 midway through the trading day. On Monday the index had fallen to a low of 74.93 which was also its weakest level since August 2008. Tuesday’s gain in dollar was expected as investors felt that the Monday’s fall in the currency was too much and too fast without any fundamental reason. Analysts also are of the opinion that the investors don’t have any reason to sell dollar any further after its recent falls. Dollar gained maximum against Sterling on Tuesday. Sterling lost ground on Tuesday after Fitch commented that among the  [...]

Is this the calm before the storm or after the storm. That’s what investors and analysts seemed to be debating on Tuesday. Tuesday was a mixed day for stock market with the indices increasing at time and falling later clearly showing that investors are being cautious after Monday’s rally when the Dow reached its highest level in 13 months. On Tuesday indices more or less settled in a mixed fashion. The Dow Jones industrial average finally closed at 10,246.97 up by 20 points. Other important indices like S&P and Nasdaq Composite however showed a marginal decline. The S&P 500 declined by 1 point to end at 1,093.01 while the Nasdaq composite declined by 3 points to close at 2,151.08. This was expected as after a rally like on Monday there are normally pullbacks. Many analysts feel that this lack of direction in the market is mainly on account of no major economic news this week  [...]

US stock markets reached new high on Monday (November 9, 2009) with Dow increasing by 204 points to reach 2009 high. Worldwide also stock markets registered gain. The markets were helped by G-20 countries announcement to continue with economic stimulus to revive the economies .With this announcement stocks gained as investors became more confident that low interest rates will be maintained to revive the global economy. On Monday Dow increased by 204 points or 2 percent, to close at 10,226.94 which is its highest level in 13 months. Other indices like S&P and Nasdaq composite also registered gains. Standard & Poor's 500 index increased by 23.78 points or 2.2 percent  to 1,093.08. The Nasdaq composite index increased by 41.62 points or 2 percent to close at 2,154.06. The Russell 2000 index of smaller companies increased by 11.96 points or 2.1 percent to close at 592.31. Year to  [...]

The world’s biggest retailer Wal-Mart Stores recently announced that is has cut prices on 100 electronic items including plasma televisions, digital cameras and mobile phones. Price cuts include a $500 reduction on a Panasonic 42-inch plasma television to $1,294. This follows the earlier price cuts announced on a collection of toys and games which had boosted sales volume. The world’s biggest retailer is aggressively cutting prices as it tries to raise weak sales at its U.S. stores. Last month, the retailer had started selling more than 100 toys for $10 each. Walmart.com cut prices on 10 unreleased hardcover books to $10 each, fuelling a price war with its online competitor Amazon.com. Both online retailers then cut their prices on those books to $9 each, after which Walmart.com reduced a penny more off that price and was selling them for $8.99 each amounting to discounts of nearly  [...]

Last month the Dow Jones Industrial Average crossed 10,000 points, passing the emblematic mark for the first time since Oct 2008 bringing optimism to investors across the world. Since hitting a 12 year low of 6,547 on March 9 2009, the Dow Jones industrial average has increased by 53 percent. Other indices like the S&P 500 Index and Nasdaq Composite Index, which measures a broader base of major stocks, also reported gains. Year to date, the Dow is up 14.1 per cent, while the S&P 500 and Nasdaq Composite have increased by 20.9 per cent and 37.7 per cent respectively. Small stocks have also registered increase as indicated by the Russell 2000 index which has increased by 24.9 per cent. Since January Dow has increased mainly due to gains in financials and technology stocks. The big gainers among the financial and technology stocks have been American Express (up by 89.2 per cent),  [...]

The economy may be showing signs of recovery but the days of gloom are far from over for the banking sector with the ghosts of bad loans continuing to haunt the sector. Nine more banks destroyed by bad loans were added to the list of failed banks in US. Including these nine banks as of date there are as many as 115 failed banks in US with analyst foreseeing more bad news in the near future. Banks that failed last week include BankUSA, Citizens National Bank, Madisonville State Bank, North Houston Bank, Pacific National Bank, Park National Bank, San Diego National Bank, Community Bank of Lemont and the Los Angeles-based California National Bank. California National Bank is in fact the fourth-largest US bank failure this year. Among the failed banks it is also one of the largest bank by branches operating as many as 68 branches across Southern California with more than $7 billion in assets.   [...]

Other important global stock market indices FTSE 100 This index covers stock of 100 most capitalised UK companies listed on the London Stock Exchange. The index is a market value weighted index and is calculated by a method called free float method. Market value (which is price of stock multiplied by the number of shares)is multiplied by the free float factor and then divided by the index divisor to arrive at the index. The Free float Adjustment factor is the total number of shares that is floated as a percentage of issued shares round off to the nearest multiple of 5%. CAC40 This is the most widely used index for tracking stocks on the French stock market. As the name suggest the index includes 40 most capitalized French companies listed on the Paris stock exchange. Like all other major stock indices this is also a market weighted index. DAX This index tracks the stocks of 30 major  [...]

Most commonly used indices in the US market The Dow One of the oldest and most widely used index, the Dow Jones Industrial Average also called the Dow is said to be measuring the pulse of the market. Currently Dow includes 30 stocks each of which are the stock of the US’s most influential companies. Companies included in Dow are 3m Co, Alcoa, American Express ,AT&T , Bank of America Corporation, Boeing Co. ,Caterpillar, Chevron Corp, Cisco Systems, E.I. du Pont de Nemours and Company , Exxon Mobil ,General Electric Company ,Hewlett-Packard , Intel Corporation , International Business Machines , Johnson & Johnson , JP Morgan & Chase & Co , Kraft Foods Inc. , McDonald's Corporation , Merck & Co, Microsoft Corporation , Pfizer Inc , The Coca-Cola Company , The Home Depot, The Procter & Gamble Company , Travelers Companies Inc , United Technologies Corporation , Verizon  [...]