The Zacks Analyst Blog Highlights: JPMorgan, Wells Fargo, Cummins, FedEx and Procter & Gamble

Zacks


For Immediate Release

Chicago, IL – July 16, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include JPMorgan (JPM), Wells Fargo (WFC), Cummins (CMI), FedEx (FDX) and Procter & Gamble (PG).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

 

China Growth, JPM Damage Control As Expected

 

The market will likely find China’s second quarter GDP growth numbers reassuring as many read last week’s second interest rate cut in less than a month as a sign of a much weaker growth trend. But the inline growth number notwithstanding, it is nevertheless further confirmation that the global economy remains in a precarious state.

On the home front, we got more details this morning about JPMorgan’s (JPM) trading loss, prompting the bank to restate its prior-quarter results even as its second quarter earnings and revenue numbers came in better than expected. While J.P. Morgan’s trading woes are clouding at the true earnings power of its banking franchise, we have no such issue with Wells Fargo (WFC) results this morning, which are almost boring by comparison (perhaps we need more boring and less exciting banks). Wells beat EPS expectations by a penny on in-line revenue.

In other economic news, the June Producer Price Index was a tad hot on the ‘headline,’ but the ‘core’ number broadly in-line with expectations. The University of Michigan consumer sentiment survey coming out a little later is expected to show a modest gain from its last reading.

With respect to China and the global growth worries, the issue came full circle for stock market investors this week when engine maker Cummins (CMI) preannounced and cited not only China, but also weakness in Brazil, India and the U.S. Cummins is the poster child for the export-centric industrial corporate players, but we have been hearing about weak economic growth affecting the earnings outlook from a host of companies in different industries ahead of this earnings season.

These include FedEx (FDX) and Procter & Gamble (PG), to name just a couple. This has raised concerns that we may see a material deterioration in the corporate earnings picture as the second quarter reporting season unfolds.

China’s in-line second quarter GDP growth rate of 7.6% was the lowest since the beginning of 2009 and the below the first quarter’s 8.1% growth pace. Many expect that the second quarter growth rate could be the low point of this year’s quarterly GDP growth readings as already implemented stimulus measures start taking effect. The proportion of growth coming from domestic consumption appears to be steadily increasing, though it will likely be a while before domestic consumption can offset weakness in exports and investments, which have thus far been the biggest drivers of growth.

Europe’s problems have contributed to China’s slowdown though the trade route, but the government’s policy of reining in speculative excesses in the real estate sector has also been significant in bringing down economic growth. Some estimates put the size of the real estate sector as high as 12% of GDP.

Tighter government regulations in the sector have showed up in reduced new construction and in demand for cement, furniture and appliances. While government officials continue to state their determination to maintain strict controls on the sector, many observers are starting to see evidence to the contrary. This could mean that the real estate sector will stop being a drag on the economy going forward.

Bottom line: Chinese growth numbers turned out to be less worrisome than many were fearing. And J.P. Morgan’s results, particularly its restatement of last quarter’s results, raise serious questions about internal controls at the country’s supposedly best-run bank, which also happens to be the largest by assets.

 

 

 Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

 

 

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Read the analyst report on JPM

Read the analyst report on WFC

Read the analyst report on CMI

Read the analyst report on FDX

Read the analyst report on PG

Zacks Investment Research



More From Zacks.com
View Comments