Interest-Free Earnings

Tale of the Tape

Good evening, folks. We made it to Friday! Hip hop hooray!! 

The market struggled to stay above water as we wrapped up the week. Every major index closed lower.

Real estate and utilities were the strongest sectors. Is this a flock to safety? 🤔 Time will tell. Energy tumbled 3.89% while financials fell 1.65%. See more on the banks below. 

The cryptos cracked. Bitcoin broke below 35K and Ethereum stumbled 7%. 

Pot stocks popped, then dropped. $MJ gapped up and opened above $20 for the first time since October 2019 before dropping to negative territory.

Bumble filed its S-1. The stock will trade under ticker $BMBL— but we wonder why not $BUZZ?? 🐝

After the close, the NRA filed Chapter 11. Here’s Bloomberg with the latest.

And here are the closing prints: 

S&P 5003,768-0.72%
Russell 20002,123-1.49%
Dow Jones30,814-0.57%

Big Bank Earnings

A few of the major banks kicked off earnings season early this morning. JPMorgan, Citigroup, and Wells Fargo all reported better-than-expected numbers. 

America’s biggest bank, JPMorgan, recorded a record profit, but the stock dropped 1.79%.

Here are the numbers:

EPS: $3.97 vs $2.62 est.
Revenue: 30.2B △ 3.4% YoY

Jamie Dimon, $JPM Chairman and CEO, will remain cautious in 2021. He said:

While positive vaccine and stimulus developments contributed to these reserve releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists.

Citigroup beat estimates and the company said it plans to resume stock buybacks during the first quarter. 

Here are the numbers:

EPS: $2.08 vs $1.35 est.
Revenue: $16.5B ▼ 10% YoY

$C sucked 6.93% despite the beat.

Wells Fargo beat on the bottom line, but missed revenue estimates. 

Here are the numbers:

EPS: $0.49 vs $0.60 est.
Revenue: $16.5B ▼ 5.2% YoY

$WFC stumbled 7.8%.

The financial ETF $XLF fell 1.65%, but it did close $0.23 from its all-time weekly high. Here’s the weekly chart:

Weekly Charts

The Russell 2000 was the strongest major index this week. The small caps increased 1.51% to close at a new weekly all-time high. 

Bitcoin bounced around before closing an inside week. Where will the crypto crack next? Place your bets… 

Ethereum also maintained its previous week’s range. $ETH.X is within 20% of its all-time high.

Here’s the weekly chart:

Energy almost flew 4%. $XLE finished at its highest weekly price since last summer. ☀️

Here’s the weekly chart:

Shake Shack soared 22% to close at a new all-time weekly high.

Stitch Fix surged 33% and closed at a new all-time high.

Here’s the weekly chart: 

Retail Represses Rate of Recovery

The monthly retail sales numbers came out today, and it’s not pretty. 😬 In December, retail sales were down 0.7%, marking the sector’s second straight monthly decline.

This is concerning because the numbers represent discretionary consumer spending— they’re used as an indicator of national economic health. 

Stephen Stanely, Chief Economist at Amherst Pierpont Securities LLC, called the numbers “an absolute disaster.”

It wasn’t all doom and gloom, though. Online sales and home improvement stores posted large gains, and retailers like Target and Lululemon thrived. Unfortunately, the rise in those numbers were heavily offset by a sharp decline in spending at restaurants and most apparel and department stores.

Here’s Crossing Wall Street with more.

Will Exxon be Exxon-Erated?

The SEC officially launched a probe into Exxon Mobil to address allegations that the company manipulated the valuation of one of its properties in the Permian Basin.

Specifically, inside sources reported the company was applying pressure to internal appraisers, forcing them to make untrue assumptions in order to alter the property’s valuation. 

The concerning part? An employee who raised these concerns  was fired last year. 😬

It’s been a rough couple of months for Exxon. The oil company cut more than 15% of its workforce, pushed back production targets, and posted billions of dollars in losses to FY2020.

Is fracking failing? Exxon’s examination will enlighten. 💡

Happy Bday, MLK 

A friendly reminder that the markets will be closed Monday, Jan 18 in observance of Dr. Martin Luther King’s birthday. 🥳

The holiday is also a national day of service— the US government encourages us to take some time on Monday to improve our local communities. 🙂 

In response to the events of 2020, there’s also a ton of cool stuff going on to celebrate MLK. Check it out

Enjoy the long weekend, and happy bday, MLK! 🎉 🎈

Links That Don’t Suck

💔 Bitcoin Has Lost That Loving Feeling

🇺🇸 Here’s What Americans Expect From Corporate America in the Wake of the Capitol Riot

💹 Crossing Wall Street: Market Review – January 15, 2021

📖 The Power of Story Telling

🛶 Washington Ferry Terminal Informed by Native American Longhouses

🔌 The Moby X by Bisimoto is a Redesigned Futuristic, All-Electric Porsche 935 Moby Dick

😂 Dunkin’ Introduces a Straw for People Too Lazy to Compost

🗺 Nissan Caravan Office Pod Features a Retractable Workspace