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Banks and Earnings
Posted On Friday, July 17, 2009 at at 10:51 AM by Finance Fanatic
Two big banks reported earnings this morning (BAC and Citi) and investors have taken the news with mixed feelings. Citi gave a much more favorable earnings report than expected, however, much of the big numbers came from the structured sale of Smith Barney, which investors discounted. Bank of America also gave a better than expected earnings report. However, Ken Lewis, CEO of Bank of America, followed up the report with some comments that were not very positive. He said despite their success in the first half of 2009, the second half would be more difficult to earn profits. He also said that because deteriorating credit quality, their difficulties are expected to last the rest of year and into 2010.
Banks having problems is no surprise to anyone who is tracking fundamental, economic data. An increasing unemployment rate, with less consumer spending will not help un-thaw the very frozen lending market. As a result, FAZ and SRS have been relatively strong today, which is a bit of a refreshment. I'd like to hear your thoughts on the banks and the winners and losers, comment below.
if the cre crash is still coming is there anyway we could see SRS trade at the old highs? 100+????
Chris, I think this is a crack in the bull egg that will make a difference in the fall..The pumpers will not pay attention today, but those comments are the fundamental argument that has kept me patient with reality going forward. I am watching technicals and won't press SKF and SRS now but some SKF and SRS oct calls will start becoming attractive in the week to come.. which strikes would you suggest?
DJ
There's plenty of reason to think this model might not prove tenable, as Xiaomi expands into high-growth smartphone markets such as Indonesia, Russia, and India.