Cooing Wall Street…
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.
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.