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Market Wrap-Up for July 13 (JPM, WFC, LXK, HPQ, DLR, YUM, more)
7/13/2012 4:16:00 PM
Investors were breathing a sigh of relief (although I am not sure why) on the results out this morning from JP Morgan Chase ( JPM ). Some market watchers feared a much larger trading loss than was actually reported. Today's rally managed to recoup much of the week's losses, but admittedly volume was abysmally low, considering today's sizable gains. We'll take it for what it's worth, as it's better than seeing shares tumble.
Shares of JP Morgan ended higher on that news, as are those of competitor Wells Fargo ( WFC ), which also came out with earnings results this morning . On the flipside, earnings results chased investors out of Lexmark ( LXK ) shares, as the printer company's outlook appears to be taking a turn for the worse . This development also dragged down shares of Hewlett Packard ( HPQ ). Despite analysts' calls on "deep value" for HPQ, the company's fundamental picture remains in question. Elsewhere, shares of Yum Brands ( YUM ), SAP ( SAP ), and Digital Realty Trust ( DLR ) all ended higher on the back of positive Wall Street analyst calls.
SuperValu Troubles, Municipal Bankruptcies Reinforce Rocky Job Market
Big headlines this week centered around numerous economic stories, but there a couple that I want to zero in on. First was the trouble with supermarket chain SuperValu ( SVU ), suspending its dividend and warning of trouble ahead. My focus here is more on the potential effect on jobs, and how much harder things will get for lower-skilled workers. Higher education is becoming an given, with a college degree today becoming roughly equivalent to a high school degree 40 years ago.
We can all see a difference between the reported unemployment numbers and then the actual real numbers (self-employed people without work, people whose benefits have expired, etc.). Despite the fact that the retail sector often provides a good number of jobs (usually the lowest-paying jobs for the most part), there is much more job risk for employees these days than in years past. Many establishments are doing "more with less." So what happens to folks who spent most of their working lives with one company doing one thing, and that company happens to go belly-up? The retirement picture is obviously more unclear for more folks than ever.
Now turn to the news in California, with two new municipalities filing bankruptcy this week. The effect will undoubtedly be a shaving down of the benefits for those municipal workers, including health benefits, pensions, and even pension hits to those who are already retired. This trend will certainly put a hurting on many of the blue collar workers who are relying totally on those jobs and the salary/benefit promises they originally banked on.
The job market for unskilled workers is extremely rocky these days. As I mentioned in yesterday's newsletter, now is the time to hustle and not take anything for granted. The separation between those who are able to earn big dollars and those who are struggling is getting wider by the minute. Thankfully, we all have the power to ensure the job market shift doesn't leave us unprepared in for a big financial shock!
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A Look to Next Week and a Weekend Preview
Looking ahead to next week, third quarter earnings will be in full swing, as we are expecting results from Intel Corp ( INTC ), Johnson & Johnson ( JNJ ), IBM Corp ( IBM ), Altria ( MO ), and Microsoft ( MSFT ), just to name a few. The focus will likely be on the economic data as well as the latest Wall Street analyst calls.