Stocks to Watch

JPMorgan Chase & Company’s  (JPM – Analyst Report) second quarter earnings came in at $1.09 per share, substantially ahead of the Zacks Consensus Estimate of 71 cents. The results also soared from the earnings of 28 cents in the prior-year quarter. The very impressive results were primarily supported by a slowdown in loan loss reserves, which more than offset a pressure on trading and investment banking revenues and a $550 million charge related to the U.K. bonus tax. Behind the Headlines Net income available to common shareholders was $4.8 billion, up 76% from $2.7 billion in the prior-year quarter. A significantly lower provision for credit losses primarily drove the results. However, lower revenues and higher non-interest expenses were the offsetting factors. Managed net revenues for the quarter came in at $25.6 billion, down 8% from $27.7 billion in the year-ago quarter. M Full post…

Bank of America downgraded Ameristar Casinos (ASCA: 14.70 0.00%), on Monday, sending the stock down 1.66% to close the session at $14.81.

Although B of A downgraded shares of Ameristar from Neutral to Underperform and lowered its price target drastically from $20 per share down to $11, the stock is attempting to crawl its way back up.

Tuesday’s trading session saw shares rise as high as $14.94 before closing the market at $14.85.

Bank of America cited expectations that regional casino operators will post lower revenues for the second quarter, as the reason for the downgrade.

Ameristar Casinos will release its second quarter financials on August 4, 2010, during market hours.

For the first quarter of 2010, the gaming company reported a 64% decrease in profits and declared a quarterly cash dividend of only $0.105 per share.

Asset allocation is when an investor divides their portfolio amongst various asset classes into percentages based on their individual time horizon and risk appetite. It used to be quite normal for one to diversify their portfolio and maintain a “buy & hold” strategy with the occasional re-balancing. However, this old style diversification that once was instrumental in reducing volatility risk has become harder and harder to achieve due to global markets which often move in sync with each other more and more over the last decade. In order to choose the asset allocation strategy in a portfolio, one must have a deep understanding of the global macro picture today. Further to this, faster moving global markets dictate that dynamic changes to the asset allocation should be more frequent and some times more drastic than it used to be.

Macro Picture

We are in unprecedented economic territory after the giant credit bubble collapse starting in 2008. Tho

Full post…

The market is slightly lower as Wall Street awaits the start of 2Q earnings after the bell.  Alcoa (AA, $10.81, down $0.13) will get things rolling and is expected to report earnings of 12 cents a share.  Aluminum prices have been in a downtrend and inventory levels are up so Alcoa could have a hard time meeting expectations.

Elsewhere, Playboy (PLA, $5.67, up $1.63) announced its founder, Hugh Hefner, is seeking to acquire all of the shares of the company he does not already own for $5.50 a pop.  This would essentially take the company private but there are other bidders interested in Playboy as an acquisition.  FriendFinder Networks could pony up a bid and already owns Penthouse magazine. 

In other M&A news, Aon Corporation (AON, $35.44, down $2.90) has agreed to buy Hewitt Associates (HEW, $46.68, up $11.28) for nearly $5 billion in cash and stock. Hewi

Full post…

- Dugald Malcolm, Montreal

Recent market action has resulted in the bear striking a considerable technical blow to the charts of the S&P 500. When I last provided an update in early June, the charts showed the S&P 500 struggling around resistance at the 200 day moving average. Although it managed to sneak just slightly above it for a few trading sessions, there were just not enough trading volume to keep it there. From an intraday high of 1,131.23 on the 21st of June, the S&P 500 shed close to 10% by July 2nd. The severity of the decline, however, was not the biggest problem with this recent move. The most significant problem lies in where the market slide technically took us on the charts.

To begin with, not only has the S&P 500 moved below its 200 day moving average, but so has its 50 day moving average.

Full post…

As of last Friday, I had little confidence that the market would stage this strong a move up, close enough for the Index to possibly show an increase during this phase. But, amazingly, it has.

As I see it, nothing is really that different. We’re essentially back to where we were at the end of June. So don’t listen to all the talk about “the bottom”, the “recovery beginning”, “optimistic earnings season” and an uptick in the 2-year Treasury yields. It’s what comes after that I’m focusing on.

I used this run up as an opportunity to lighten up further and to add to some market index shorts. Sorry, all, but I’m hoping for no more than a 0.5% increase tomorrow and then, with some disappointing earnings reports, for significant declines over the remainder of the summer. I’m playing it like there’s some more left on the downside.

Full post…