Tag Archive for Aa

Big Bank Earnings Today: Wells Fargo (NYSE: WFC) and JPMorgan (NYSE: JPM) – Money Morning

Two of the largest U.S. financial institutions kicked off third-quarter results for big bank earnings today, giving us a peek at how they fared amid tough times for both firms.

Wells Fargo & Co (NYSE: WFC) is in the midst of slashing headcount in its mortgage unit by some 1,800, and JPMorgan Chase & Co (NYSE: JPM) is tangled up in settlement talks with the U.S. Justice Department.

Big Dow Index Changes: What They Mean for Your Stocks – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. In the biggest Dow Index changes in nearly a decade, Alcoa Inc. (NYSE: AA), Hewlett-Packard Co. (NYSE: HPQ), and Bank of America Corp (NYSE: BAC) are being dumped from the closely watched 30-stock index. Athletic gear maker Nike…

2013 Earnings Season: Forget Alcoa; Track These Real Bellwethers – Money Morning

At the start of every earnings season, investors typically turn to Alcoa Inc. (NYSE: AA) – the first company in the Dow Jones to report earnings each quarter – as a market bellwether.

But Alcoa is no longer a reliable market indicator.

“With this upcoming earnings season, we wouldn’t put nearly the same confidence [in Alcoa] that we would just five or six years ago,” Ryan Detrick, a Cincinnati-based analyst at Shaeffer’s Investment Research, told Bloomberg News. “The company’s results now predict the direction of the market about as well as a coin flip.”

In fact, Money Morning Global Investing Strategist Martin Hutchinson said Alcoa, the largest producer of aluminum in the U.S., should never have been used as an economic indicator.

“I don’t think Alcoa was ever a very good bellwether; it just reports first,” Hutchinson said. “The aluminum cycle tells you something about manufacturing conditions, but manufacturing is a small part of the economy these days.”

So if not Alcoa, then what stocks should investors pay attention to this earnings season?

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Why Apple Inc. (Nasdaq: AAPL) is Too Rich For the Dow Jones

Assuming the Dow Jones Industrial Average represents the biggest, most influential companies in America, Apple Inc. (Nasdaq: AAPL) easily qualifies.

With its massive market cap, trend-setting products, and global brand recognition, it is easy to argue Apple belongs as much or more than any of the current tech companies in the index.

In fact, Apple has superseded all of them, particularly Hewlett-Packard Co. (NYSE: HPQ) and Microsoft Corp. (Nasdaq: MSFT).

Yet the Dow Jones has ignored Apple while letting far weaker companies like, Bank of America Corp. (NYSE: BAC)and Alcoa Inc. (NYSE: AA) remain.

So what gives?…

In a nutshell, Apple stock is too rich for the Dow Jones Industrial Average.

Because the Dow Jones is price-weighted, Apple’s current $565 share price would simply overwhelm the index.

If included, Apple stock would account for about 25% of the Dow Jones. That’s more than double the 11.5% of current leader International Business Machines Corp. (NYSE: IBM).

“It wouldn’t be the Dow Jones Industrial Average,” Nicholas Colas, chief market strategist at ConvergEx Group told the Associated Press. “It would be the Apple Plus Some Other Stuff Index.”

In this case, a price move of just 5% in Apple stock could push the DJIA up – or down – about 200 points.

Looking at it another way, had Apple been added to the Dow Jones in 2009 instead of Cisco Systems Inc. (Nasdaq: CSCO), the Dow would now be over 15,000.

That’s well above the Oct. 2007 record of 14,164 and 2,500 points higher than where it stands today.

With that kind of heft, it’s no wonder the Dow has shunned Apple.

How the Dow Jones Industrial Average Works

But it’s not just Apple. Other Dow candidates trade high in the triple digits as well.

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The Markets Are About to Tell You Something

Most people seem to have a hard time understanding why the markets do what they do.

The only reason I don’t is that I’ve been trading professionally for 30 years.

Not that I “got it” when I started out. I didn’t. I had to learn. And I learned much of what I know the hard way. I made a lot of mistakes. I studied my mistakes, I still do, just as much as I study what moves markets and what I get right.

I’m always learning. That’s because everything changes. You have to always take in new data, mesh it with recent data, layer it over the past, and not ever think you know for sure what’s going to happen.

So, how do you do it? How do you understand what’s going on with different markets?

Here’s how I do it (and get it right a lot)…

It’s First and Foremost About the “Big Picture”

I synthesize all the big goings-on, all the headline market-moving news and data points, and I watch and “listen” to how the markets react.

Money moves markets, but psychology moves money.

Markets are living things. They have feelings; their reactions are a direct reflection of the psychological impact reflected in the buying and selling of traders (first) and investors (distantly second) to the goings-on that participants believe will affect the decision-making of other market participants.

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