JPMorgan, a true bellwether for the U.S. economy, reported better than expected fourth-quarter 2010 results this morning. But positive earnings surprises are nothing new from JPMorgan; they beat in each of the last four quarters. Yesterday after the close, we got excellent results from Intel.
All in all, it’s a pretty good start to the earnings season. If this trend continues over the next two weeks, I would be looking for positive estimate revisions to 2011 earnings expectations.
But the market will most likely look past these strong earnings reports. We have a lot of economic reports coming out today: CPI, Retail Sales, Industrial Production, and the University of Michigan survey on the docket.
Retail Sales in December were strong, but came in weaker than expected. The CPI numbers, both on a headline as well core basis, came in line with expectations.
We also heard today of another monetary tightening move from China, with the central bank again raising the reserve requirements by 50 basis points. The Chinese move brings back that country’s inflationary struggles to the forefront. This issue will likely weigh on commodity and basic material stocks today.
Sheraz Mian
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