Daily Profit : JP Morgan

How to Trade this Market

Ian Wyatt — Thu, 06 Oct 2011 18:19:00 GMT

Stocks rallied put together a very impressive rally out of the hole on Tuesday. After being down over 200 points in the early going, the Dow Industrials rallied in the final hour to close 250 points to the upside.

How many times have stocks been down +1% at 3 pm only to rally and finish in the green? Bespoke Investment Group tells us that since 1985, that type of powerful reversal gas occurred only 10 times. And 8 of them have come since October of 2008.

Interesting times, indeed.

There are likely many reasons for these types of powerful one-way moves. And I'm sure the prevalence of computer-based trading is a major culprit. It seems to me that much of Wall Street now trades in one direction. Everyone is either bearish or bullish at the same time. And that leads to strong moves, but also may create more churning up and down.

In any event, I think we can also conclude that short-covering was a major reason for the strength of the reversal. Stocks were extremely oversold, and valuations were quite compelling. It is for this reason that I told you Monday that a rally was imminent. But now that we've seen some upside, let's not get carried away.

Jason Cimpl, at TradeMaster Daily Stock Alerts, recommended a slew of upside trades on Tuesday. By the time the market closed, his readers were sitting on 7% 8%, and 9% gains.

I've said it before, but no one is better at trading this market than Jason Cimpl. If you want to profiting right away, check him out HERE.

I still believe there is little reason to wade into this market with any conviction until after Greece defaults (of course, I have no problem with short-term profiteering). With any luck, that will happen before Greece actually runs out of money in mid-November. Too bad the EU still doesn't seem to have any sense of urgency. At the very least, the EU needs to throw cash into Euro-banks and fortify those balance sheets. News of this will send stocks higher.

But when you read statements like this... (quoted from Bloomberg):

[German Chancellor Angela Merkel] said that she supports recapitalizing European banks "if there is a joint assessment that the banks aren't adequately capitalized" and finance officials develop "uniform criteria." Germany is ready to discuss possible bank aid at this month's EU summit, she said.

...you are reminded just how dysfunctional the EU is. I mean, the market has clearly stated that Euro-banks are undercapitalized. And Merkel is still suggesting that the EU needs to come with a system for deciding what the market already knows.

U.S. bank stocks have been absolutely creamed over the last couple of months, and prices are so low, they now look attractive. Still, I have reservations. The banks are exposed to Euro-bank debt. Morgan Stanley (NYSE:MS) is the poster-child for this exposure, holding up to $39 billion in exposure to Euro-bank debt.

Of course, Morgan Stanley's exposure is hedged, but how comforting is that? After all, banks were hedged before the housing bubble burst too, but one of the main underwriters of that risk, AIG (NYSE:AIG), couldn't pay. And perhaps the very worst aspect of the bailouts was the cash that went in AIG's front door and right out the back to companies like Goldman Sachs (NYSE:GS).

But the Greek-default as well as Euro-bank situation is just one that's weighing on the U.S. banks. There's also the continued weakness in the U.S. and Operation Twist. The weak economy impairs banks earnings power. And so does Operation Twist, which is pushing long-term yields lower.

That's why earnings estimates for banks have been cut so sharply in recent weeks.

This situation has led to sharp declines for banks, even those that don't have much Euro-bank exposure, like JP Morgan (NYSE:JPM).

As much as I might like to, I still can't get bullish on this group.

Oil and tech stocks, however, are a different story. These groups have made strong moves off of recent lows.

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With the passing of Steve Jobs yesterday, the world lost one of the most influential entrepreneurs of our time. Steve's creativity allowed him to be a visionary in the world where technology met consumer goods. His uncanny ability to anticipate the future and create revolutionary products that most people couldn't even imagine separated him from everyone else. Steve often said that you should live every day as though it was your last. He certainly lived his life this way, and showed us just how much a single individual is capable of accomplishing.

Steve has left a lasting mark on the world today, and we'll all benefit from his many contributions to in the coming decades. My thoughts go out to Steve's family, friends and colleagues during this time of grieving.

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Is the U.S. Already in Recession?

Ian Wyatt — Fri, 19 Aug 2011 19:27:00 GMT

Economists are responding to weakening economic data by slashing their U.S. GDP growth estimates. JP Morgan's economists now say growth will top out at 1% in the fourth quarter, and slow to 0.5% in the first quarter of 2012.

Goldman Sachs has already reported there is a 1 in 3 chance the U.S. will slip back into recession.

Investors aren’t waiting around to see if it's recession or just slow growth. They are selling stock and buying safe haven assets like precious metals and Treasury Bonds.

Gold has rallied as much as 24% in a little over a month. And silver has rallied right along with gold, up 24% since July 1.

With silver prices currently over $40 an ounce, you'd probably think I was crazy to suggest that you could buy silver for just $3.90 an ounce...

However, I've got the next best thing: a company that has locked in a 20-year supply of silver -- at $3.90 an ounce. The terms of this deal mean this company will get around 12 million ounces of silver every year. And the price is locked in at $3.90 an ounce even as silver prices continue to rise.

It doesn't matter if production costs escalate or how high silver prices go, this company won't pay a penny more for its silver supply. Most analysts, including those at Wyatt Investment Research, expect silver prices will be higher, much higher and in years to come…

I'm Ian Wyatt, and I've put my own money in this stock as part of Ian Wyatt's $100k Portfolio, where I'm using my own money to show individual investors like you how to turn $100,000 into $1 million. And this $3.90 an ounce silver stock is helping us achieve our goal.

Please keep reading to learn more how this silver company could add substantial profits to your portfolio...

Click here.

I'm Giving Away Silver Coins

Ian Wyatt — Sat, 20 Nov 2010 16:46:00 GMT

"Durango - the Spaniards dream - lies in the heart of the famous Sierra Madre Mountains. Its beautiful climate, ancient forests, graceful plains and above all, its wonderful wealth of gold and silver and copper - together with an abundance of water - have combined to make it a perfect Utopia." - Las Minas de Mexico, J.R. Southworth, 1905

Greed and corruption have a way of following precious metals - and so when silver was found virtually lying on the ground in the Sierra Madre mountains a flood of prospectors headed to the hills of Mexico to seek their fortunes.

At the time when J.R. Southworth wrote 'La Minas de Mexico', a book about mining silver in Mexico's Sierra Madre Occidental, the magic metal was trading for around $40 an ounce.

Decades later, the famous Hunt brothers were exposed for trying to corner the silver market. At that time, silver reached $68 an ounce.

Today, silver is trading for around $25 an ounce and there are still rumors that the silver market is being manipulated. MarketWatch recently reported that suits have been brought against JP Morgan Chase (NYSE: JPM) and HSBC (NYSE: HBC), alleging that these financial institutions have amassed massive short positions on silver futures, and as a result have influenced the price of silver since early 2008.

I guess the more things change, the more they stay the same...

***One thing that has 'remained the same' is that individual investors have made huge profits investing in junior mining companies over the years. Legendary resource investors like Doug Casey and Jim Rogers have literally made fortunes by buying shares of undiscovered and unknown junior explorers - and sitting on those positions for years as they rise by thousands of percentage points.

It's not easy - but it is possible. And you can do it too.

Today is the day to start. I've just finished days of work putting together a special report on three junior silver mining companies. I've done the research, valued their silver reserves, and spoken with company representatives. I also own these stocks in my personal investment account, and I expect to buy more shares in the future in accordance with our company’s trading compliance policy.

***I firmly believe investors can make huge profits investing in silver with these three companies. So to help motivate my readers, I've put together a special offer that you can't refuse.

Through Sunday night I'm giving away a free one ounce American Silver Eagle $1 coin to the first 200 people to sign up here to receive my Special Report: Sierra Madre Silver Profits. This offer is limited to only the first 200 people, so I urge you to take action immediately

I just finished this report last night, and it's now available for you to read. In this report I feature three exciting silver mining companies that all offer tremendous upside potential for precious metal investors.

Each of these companies has silver properties in Mexico's silver belt, the Sierra Madre Occidental.

For 500 years the Sierra Madre region has been known to hold some of the largest silver deposits ever discovered. With the Mexican mining industry bringing in more silver production every month and the price of silver steadily rising, it’s the perfect time to build a position in companies that are mining silver in this region.

These three uniquely positioned, overlooked junior mining companies remain undiscovered, despite the soaring price of silver. And all three companies have near-term catalysts on the horizon that could move their share prices significantly higher.

In this special report, I will tell you exactly what these companies are doing to develop their silver mines and how silver production is helping their stock prices rise.

***Let me tell you a little bit about why investing in Mexican silver miners is such a great opportunity right now...

Silver is often referred to as the Magical Metal because of its unique properties. It's known for being the best conductor of electricity, the best conductor of heat, and the most reflective of all metals. What's more, it's malleable and has anti-bacterial properties.

But there is more to silver than just its commercial and industrial purposes. Like gold, silver is prized as a safe haven asset and as a store of value. Individuals, institutions, and nations buy silver as a hedge against inflation, and to provide financial security in the event of a global currency crisis.

And while physical silver represents a compelling investment right now, I'm most bullish on silver mining companies because of their ability to substantially increase the value of their reserves and profitability as the price of silver rises.

The three companies I'm recommending today represent an excellent way for investors to profit from higher silver prices because all three of these companies have operations in the resource rich Sierra Madre Mountains in Mexico.

We're going to invest in silver mining companies because they have leverage to the upside as silver prices rise. However, each of these companies represents a compelling investment even if silver prices retreat to $18 per ounce. Regardless of whether silver is at $18, $20, $30, or more, these three companies are well positioned to bank profits.

· The first company has an exciting prospect with a vast silver reserve that it plans to bring to production through a joint venture with one of the best silver production companies in the business.

· The second company is already in production, and is increasing profitability as it expands silver production.

· And the third company is an exploration stage company with reserves that not only include silver, but gold, and copper as well. This company has teamed up with one of the best in the business to bring its properties closer to development stage.

All of these companies are compelling investments for different reasons. By investing in all three stocks, investors can capitalize on the Sierra Madre silver opportunity.

***Remember, this report was just published last night so few people have seen it yet. And because these are micro-cap companies, I'm only sending the report out to the first 200 people that sign up for a trial subscription to Small Cap Investor PRO.

To get started making money with these three exciting junior exploration companies, click this link and I'll rush you my Special Report: Sierra Madre Silver Profits.

The first 200 people to sign up will get the report, as well as a free American Silver Eagle coin, valued at approximately $32.

I believe this is a very exciting small cap opportunity, and hope you enjoy reading my report as much as I enjoyed writing it.

Collision Course With Dow 10,500 Won't Be a Straight Line

Ian Wyatt — Wed, 14 Oct 2009 16:47:00 GMT

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Your Daily Profit

October, 14 2009

*****Intel and JP Morgan

*****Dow 10,500

*****How to Make Triple the Gains on Gold

Fellow Investor,

Intel (Nasdaq:INTC) reported excellent earnings last night, as I expected. The chip-maker beat on revenues and earnings per share. The stock is up close to 3% in the early going. That’s because Intel’s results weren’t exactly a surprise. During its mid-quarter update, Intel said the quarter was looking good. And the stock ran from $19 to $20.50 over the last few days. And as of press time it’s at $21.00.

Intel’s earnings are especially important because the company beat revenue expectations. As we know, investors want to see revenue growth. Costs have been cut, and if the economy is truly turning around, sales should grow.

*****JP Morgan (NYSE:JPM) destroyed expectations, posting $0.82 in per share earnings when analysts were expecting $0.52. Investment banking was the biggest contributor to JP Morgan’s result. But I’m impressed by the gains the company made in bond trading. Revenues for fixed income went form $800 million last year to $5 billion this year.

Banks have to find new ways to make money, and JP Morgan is doing it.

Another part of JP Morgan’s quarter illustrates how the Cash for Clunker Stock Rally is working. Stock underwriting revenue for JP Morgan rose 31 percent to $681 million, and bond underwriting fees rose 19 percent to $593 million.

In other words, JP Morgan took in over a billion in revenue helping other companies raise cash by selling stock or bonds. When money is cheap, there’s more of it available.

*****The Dow Industrials is on a collision course with 10,000. And I think we will see 10,500 before the year is out. But there will be a dip to buy sometime soon. The Dow’s not simply going to run through 10,000 on its way higher.

Big round numbers tend to stand out as resistance points. And there aren’t any numbers more round than 10,000. Look for a move above 10,000 soon, and then a reversal.

*****The U.S. Dollar is hitting 14 month lows and gold is hitting record highs at $1,070. Gold prices finally broke through $1,000 an ounce on October 6. Gold is up 7% since. But the mining stocks in the Global Commodity Investing portfolio are up 13%, 19%, and 23%.

That’s because profits for gold mining companies rise exponentially compared to the price of gold. As you can see, in one case, we’re seeing a stock move 3X the price of gold. THAT’S how you make money when gold starts to run. And if gold continues on to $1,200 an ounce or higher (which is likely) Global Commodity Investing members will clean up. Find out how you can join us HERE.

Until tomorrow,

Ian Wyatt

Editor

Daily Profit

Meredith Whitney Upgrades Goldman While Geithner Assures Arabs Our Money is Good

Ian Wyatt — Mon, 13 Jul 2009 14:40:00 GMT

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Your Daily Profit

July 13, 2009

*****Strong Dollar Propaganda

*****Earnings and Economic Data

*****Blueprint for Profits

Fellow Investor,

A few weeks ago, Treasury Secretary Geithner had to go to China to assure our largest creditor that their investment in the U.S. dollar was safe. Now he’s off to Saudi Arabia and United Arab Emirates for another round of “strong dollar” propaganda.

Of course, it’s not an easy task to convince foreign governments that the U.S. wants a strong dollar when interest rates are at zero and we’re selling tens of billions in Treasury bills virtually every week. You may recall Geithner’s assurances elicited laughter from a group of Chinese college students when he made the strong dollar pledge there.

If college students know the score, you can bet everyone else does, too. But Treasury auctions have been met with plenty of demand, and that’s a good thing.

*****Fed Chief Bernanke is expected to reveal to Congress just how he plans to reverse his stimulative monetary policy next week. The Fed has expanded the money supply by about $1 trillion, cut rates to zero and doubled the assets on its balance sheet.

In normal times, this would be highly inflationary. But these aren’t normal times. Were it not for the Fed’s action, the U.S. economy would be broken even more than it already is.

Now, normal times will return. And how the Fed plans to reel in liquidity when the economy starts to grow again is critical. The potential for runaway inflation is real, and the Fed will have to be just as diligent at fighting inflation as it was fighting deflation.

*****Goldman Sachs (NYSE:GS) received an upgrade from the very same banking analyst that predicted collapse of mortgage-backed securities, Meredith Whitney.

Upgrading Goldman is easy. The bank is practically a subsidiary of the U.S. government. But the timing is interesting, given that Goldman reports earnings before the bell tomorrow.

And speaking of earnings, this is a big week for some important companies. In addition to Goldman, we get Intel (Nasdaq:INTC) after the bell tomorrow. Thursday, we’ll hear from JP Morgan (NYSE:JPM), Google (Nasdaq:GOOG) and IBM (NYSE:IBM). Then Friday, we get General Electric (NYSE:GE), Bank of America (NYSE:BAC).

Tech and financials – the anchors for the U.S. economy will be reporting this week. Investors will be watching these early earnings reports closely. Much of the rally of the past few months can be attributed to investors’ faith in companies meeting Q2 earnings, even if expectations were substantially lowered. Any bad news from these bellwether companies and the market could turn. We’ll be watching closely.

*****As if earnings weren’t enough, there’s a full slate of economic data coming out this week, too. Tuesday, it’s the Producer Price Index (PPI) along with retail sales and business inventories.

Wednesday, we get the Consumer Price Index (CPI), the Empire Manufacturing Survey from New York state, capacity utilization, industrial production, crude inventories and the minutes from the last FOMC meeting.

Thursday, it’s initial unemployment claims and the Philadelphia Fed.

And finally, on Friday, we get building permits and housing starts for June.

Whew! That’s going to be a lot of data to review.

*****On January 15, my Top Stock Insights advisory service released its Predictions 2009 special issue. This issue was our blueprint for profits with mid- and large-cap stocks as we headed into the new year.

In that issue, I outlined the case for oil, gold, commodities and biotech/healthcare stocks. And we took 51% profits on an oil stock, 25% on a gold stock, another 25% on a commodity stock and we’re still holding three biotech/healthcare double-digit winners in the portfolio.

In other words, our expectations for the year led my readers to some nice gains this year, and there’s more to come...

Now, I’m all set to release an update to that special Predictions issue that will get us through the rest of this year with more solid gains. It comes out on Wednesday, and if you’d like to get my blueprint for profits for the rest of 2009, please click here. Or go to topstockinsights.com.

*****Also, if you missed TradeMaster Daily Stock Alerts technical analyst Jason Cimpl’s weekly video chart analysis, here’s that link again.

*****As always, send me your comments, your questions and your jokes to editorial@247investor.com.

Ian Wyatt

Editor

Daily Profit

Russia Joins China in Push for New Global Currency to Replace the Dollar

Ian Wyatt — Wed, 03 Jun 2009 13:39:00 GMT

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Your Daily Profit

June 3, 2009

*****Global Currency

*****When Big Money Plays Defense

Fellow Investor,

Russia is grumbling. Seems they are not happy that rising debt, slow growth and record Treasury bond sales are dragging the U.S. dollar down. In fact, Russian president Medvedev is calling for some kind of global currency to replace the U.S dollar as the world’s reserve currency. (Sound familiar? Like he’s taking a page from the Chinese?)

In an interview with CNBC on Monday he said, “We need some kind of universal means of payment, which could create the basis of a future international financial system…”

Of course, this is a horrible idea. As one analyst put it, “It took decades for the euro to be established. I can only imagine how long it would take for the BRIC countries to put together a currency.”

*****It’s an investing truism that the financials always lead the stock market. Recall that it was bullish comments from Citigroup that kicked off this rally back in early march. And I’m sure nobody needs reminding that it was the financials that kicked off the worst bear market in 80 years.

When the S&P 500 and the Nasdaq blew through their 200-day moving averages on Monday, the financials were out in front. But today, even though the major indices finished with slight gains, many financials finished in the red.

American Express (NYSE:AXP) dropped nearly 5%. JP Morgan (NYSE:JPM) lost 4.46%. Wells Fargo (NYSE:WFC) lost 4% and Citigroup (NYSE:C) lost 4.88%.

Bank of America (NYSE:BAC) is about the only major financial stock to finish in the green, and that was a 1.7% gain. In fact, the Financials SPDR (AMEX:XLF) failed to make a new recovery high along with the Nasdaq and S&P 500.

So what gives? Why have the financials underperformed, and why were they weak today?

*****One clue comes from the Healthcare Select SPDR (AMEX:XLV). As you may know, healthcare stocks are considered defensive stocks. That’s because their revenues are seen as being stable as healthcare is a necessary, as opposed to discretionary, expense.

In difficult markets, institutional investors will park their money in healthcare stocks as a way to maintain exposure, but lower risk.

If we compare the Healthcare SPDR XLV to the Financial SPDR XLF, we see an interesting divergence starting on May 8. Healthcare has been trending up since that date. And the Financial SPDR has been trending down. To me, this looks like sector rotation.

It appears that institutional investors are moving money out of aggressive financial investments and into defensive healthcare stocks. When the institutional investors start playing defense, individual investors should pay attention.

*****Technical analyst for TradeMaster Daily Stock Alerts, Jason Cimpl, thinks the rally has about another week before we start seeing some downside. And for good measure, he recommended that his readers take their 29% profits on Fushi Copperweld (Nasdaq:FSIN). This trade took less than 3 weeks. Nice job, Jason.

Jason is still holding the two stocks you may have learned about from the TradeMaster video I included in yesterday’s Daily Profit. In case you entered either trade, you should know that Jason has recommended a stop loss for FXI at $35.15 and UNG at $12.60. If you missed the video, you can check it out HERE.

*****As you know, Wednesday is usually Newsletter Advisors Weekly. In the spirit of summer I’m giving my friends in the investment advisory world a break this week, so there won’t be any interview today. If it’s sunny and nice where you are, be sure to get out and enjoy the weather; before you know it, the dog days of summer will be upon us.

Feel free to write and share your thoughts and comments: editorial@247investor.com. I’ll talk to you tomorrow.

Ian Wyatt

Editor

Daily Profit

Nationalization = Communism?

Ian Wyatt — Tue, 03 Mar 2009 18:51:00 GMT

*****Lending Profits

*****Nationalization = Communism?

*****Recovery Portfolio

Fellow Investor,

It is a strange sight to see the Dow Industrials trading at 6,700. That's still a level from 1997. And it still indicates that people don't want to own stocks. At this point, it seems to be as much about available capital for investment as a willingness to invest.

Valuations are low, the Dow is trading with a p/e of around 20. But that's still not as low as it's been during past recessions.

Still, it might be helpful to add some flavor to the current p/e ratio of the Dow. Consider that Citigroup and Bank of America don't have earnings. Neither do Ford, GM, Alcoa. It's safe to say that earnings at JP Morgan, American Express, Goldman Sachs and GE are hanging by a thread.

Obviously, any earnings associated with lending are seriously impaired, at best. But it's also obvious that at some point, earnings from lending will return. And the p/e for the Dow and other indices will drop substantially.

It's how long it will take to see a resurgence of lending earnings that's the question.

*****We've got a showdown of economic heavyweights brewing between PIMCO's Bill Gross and NYU economics professor Nouriel Roubini. Roubini is the champion of nationalization of zombie banks. Gross is in favor if continued bailouts from the government.

The difference in opinion is fundamental. Gross is an investor. He prefers to see any solutions maintain current equity structures. It's also no coincidence that Gross and Co. are advising the government on its handling of Bank of America.

Roubini is an economist. His perspective is not driven by any sympathy to current shareholders. He wants to see the economy moving again. And in his opinion, nationalization of zombie banks is the quickest means to that end.

To the "let 'em fail" crowd, nationalization should be your preferred solution. Nationalization removes current management, wipes out shareholders and puts the banks back in the hands of stronger private ownership. Zombie banks would likely be in government hands for a matter of a few days - just long enough to strip out the impaired assets. I guarantee there's no shortage of private equity groups eager to buy a healthy bank with a strong brand name.

*****I'm starting to suspect that CEOs like Bank of America's Ken Lewis would make pretty savvy politicians. It seems to me some of these execs have done a terrific job of inflaming the populist association of nationalization with communism.

By invoking the evils of nationalization, we now feel that sinking another $30 billion into AIG and $25 billion into Citigroup is a better alternative. And maybe it is.

I also got to thinking that maybe it was all Paulson's fault. That it was a mistake to bring the Wall Street perspective on deal-making into the government's financial dealings with failing companies. Taking preferred stock and warrants in exchange for loans isn't exactly laissez-faire capitalism.

Unless it's acceptable for the government to think of itself as a capitalist entity, with taxpayers for shareholders.

As the lender of last resort in broken capital market, maybe Americans would feel better if the government had kept its nose out of business and simply handed over the cash. Somehow, I doubt it.

I think, as taxpayers, we want to be compensated for the risk we believe we are assuming in bailing out AIG and Citigroup.

***** When the government lent Chrysler $1.3 billion in 1979, it received 14.4 million warrants for Chrysler stock in exchange. So Paulson had precedent on his side.

And it's reported that Chrysler asked for the warrants back in 1983, but the adverse reaction from American taxpayers caused Chrysler to withdraw its request.

But through his calculated use of the "n" word - nationalization - Lewis has made sure that he won't be taking any Iacocca-like $1 dollar a year salary. Lewis destroyed billions in shareholder value, but he's still getting his.

I should probably apologize for continuing to bring up the nationalization thing. I don't advocate it is the only way out of this financial mess, even though I do think banks are holding onto impaired assets and delaying the recovery process because they think prices will eventually recover.

Besides, Obama and Geithner have made it pretty clear that they want the banks in private hands. Of course, that's what Bush and Paulson said about Fannie Mae and Freddie Mac, too.

*****Finally, with the recent sell off, I simply have to think it's a good idea to dip a toe in the stock market pool. Yesterday I mentioned a few stocks that we like at Daily Profit: Graham Cop (AMEX:GHM), CardioNet (Nasdaq:BEAT), SXC Health Solutions (Nasdaq:SXCI) and Emergent BioSolutions (NYSE:EBS).

*****The next Recovery Portfolio video conference is coming up on March 10, 2009 at 6 pm Eastern time (with on-demand viewing for investors in central, mountain, and pacific time zones). Given the recent stock market declines, we thought it would be timely to update out outlook for 2009 and give you the latest on where we see opportunity. You can register at the following link:

http://www.recoveryportfolio.tv

Best Regards,

Ian Wyatt
Editor
Daily Profit