Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net
Fed Chairwoman Janet Yellen graced Congress today with her presence and arguably dovish remarks during her semi-annual report on monetary policy. True, her comments may not have been the stuff HBO series are made of but they did rattle Wall Street and sent its stocks and indexes south for a bit. The Fed Chairwoman wouldn’t offer up a time-table on any plans to raise short-term interest rates and still wants help from the Central Bank. “The economic outlook is very uncertain,” she said. Ugh. Not exactly the words you want to hear from the Fed. She also was not moved by the improving unemployment numbers yet she wasn’t too concerned about the slightly increasing inflation. “We have seen false dawn,” Yellen said, probably not meaning to be as dramatically poetic as the statement sounded. She’salso not too happy about the housing sector and again inadvertently sounded slightly poetic when she referred to the biotechs and social media sector as “stretched.” She apparently feels their stock values are very un-poetically inflated.
Image courtesy of 2nix/FreeDigitalPhotos.net
The country’s second largest bank (by assets), the almost indomitable JP Morgan Chase graced the world with its second quarter earnings today. It beat Wall Street’s predictions. Yay! But wait a minute…its earnings and revenue both took a dive this year with an 8% decline in second quarter profit which I know has you all broken up inside. The bank’s shares gained $1.46 a share when Wall Street predicted $1.29 but its revenue fell $5.99 billion from $6.5 billion a year ago. Just like its banking pal Citigroup – who also released its earnings yesterday and also reached a multi-billion dollar settlement with the Department of Justice over its bad mortgage practices – JP Morgan Chase saw its trading revenue fall.
I double dare you to go to your local pharmacy/supermarket with your full shopping list in hand and try NOT to walk out with a brand that isn’t part of the Johnson & Johnson family. Or then again, don’t bother because it simply is not possible. The company owns…well everything. Almost. Which explains why its second quarter earnings trumped Street estimates jumping 9% in its revenue to $19.5 billion and gaining 13% on its profits. Sure sales of stuff like Tylenol and baby oil helped. And don’t forget about Neutrogena and Aveno (yeah, it owns those as well). But Johnson & Johnson also made some nice chunks of cash with help from its Hepatitis C drugs Olysio and Sovarid. Yeah it has those too.
Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net
Shares of Citigroup fell 5% today because it failed the Federal Reserve’s “Stress Test.” The US government feels Citigroup has “a number of deficiencies” and wouldn’t be able to handle another economic downturn, like the one from 2008 that keeps rearing its ugly face. The Fed also doesn’t want to have to bail Citigroup out – again. The Fed has what they call “qualitative concerns” about Citigroup and some other banks that have over $50 billion in assets. For people like you and me that means they need more money on which to fall back should economic disaster strike and they need to up their business practices A game. They have ninety days to fix these problems. Or else….I don’t know what else. I guess they just get another deadline. Other banks that also failed the stress test include HSBC North America, RBS Citizens Financial Group and Santander Holdings USA.
Image courtesy of twobee/FreeDigitalPhotos.net
iPad users the world over can breathe a collective sigh of relief. Microsoft Office for the iPad has arrived. Phew! Microsoft chief Satya Nadella finally FINALLY made the big announcement today. But apparently Wall Street knew way before and was very excited because shares of Microsoft (NASDAQ:MSFT) began climbing last week. Probably the $1.4 billion in projected revenue helped the Street’s enthusiasm. You can go to the Apple App store and get the free download. But if you actually want to create and edit, you’re going to have to purchase an Office 365 subscription.
These lemons aren’t so sour after all…
Image courtesy of lamnee/FreeDigitalPhotos.net
Lululemon Athletica clearly has some great karma. Despite hitting a major snag this year with see-through yoga pants, the athletic wear company struck its best warrior pose and beat Wall Street’s fourth quarter estimates by going up 7%. Lululemon (NASDAQ:LULU) sales hit $521 million when it was expected to only reach $515 million. Newcomer CEO Laurent Potdevin, who also worked at TOM’s and Burton Snowboards, has big plans for bringing Lululemon to the rest of the world. Wall Street loves talk of expansion, especially global expansion. And it also loves it when companies beat expectations.