Stock Preacher

Morgan Stanley reported Wednesday that it had returned to profitability in Q-3. The New York-based bank holding company said it earned US$498M or 38 cents a share, beating the Street’s expectations. Earnings from continuing operations were US$757M in Q03 after a loss of US$159 in Q-2 Y 2009. Net revenue in Q-3 was US$8.7B compared with US$18B in Q-3 Y 2008. The bank said revenue in the most recent quarter was lower in part because of a continued improvement in debt-related credit spreads that reduced sales and trading revenue. “Morgan Stanley continued to build momentum across our business this quarter,” the chairman and chief executive, John J. Mack, said in a statement. “We still have work to do in sales and trading.” Shares of Morgan Stanley, which had reported per-share losses for three straight quarters before Wednesday, rose more than 6% in morning trading in the New York Stock Exchange.

Popularity: unranked [?]

Goldman Sachs Group Inc’s trading operations helped the dominant Wall Street firm quadruple its earnings, but investment banking results were not as exciting and its shares sold off a bit on the report. Goldman’s compensation packages have drawn some scrutiny, but stayed on to hand out more than US$20B in Y 2009 bonuses, the equivalent to more than US$630,000 per employee and is likely beat a record set for compensation in 2007. The report noted that Goldman’s investment banking and asset management revenues were lower. The bank fell to No. 2, behind Morgan Stanley, in M&A adviser rankings for deals announced globally through Q-3 according to Thomson Reuters. Goldie also dropped a spot to No. 7 in global capital markets. Fixed income, currency and commodities (FICC) trading nearly quadrupled, helping propel overall revenue to a forecast beating US$12.37B. However, the US$5.99B in FICC revenue, driven by credit products and mortgages, lagged Q-2 and fell short of some analysts’ high expectations. Read more

Popularity: unranked [?]

Wal-Mart Stores Inc. reported Q-2 earnings Thursday that beat Wall Street expectations, and they said that they are preparing for the US consumers’ newly adopted frugality to be the “new normal” as they do not expect consumer spending to recover in the near term. Lower-priced stores may be suffering less than other retailers during the recession, but that still presents big challenges. Wal-Mart saw an unexpected drop in same-store sales at its U.S. stores for the quarter. Spokesman John Simley said the quarterly decline is believed to be Wal-Mart’s first ever, but noted that same-store sales would have been flat without food price drops. Same-store sales is a Key industry indicator comparing year-over-year sales at stores open more than a year. Customers at Wal-Mart, the world’s largest retailer, are paying for more of their purchases in cash or with debit cards than with credit cards, and they keep buying less expensive products and smaller amounts.

Popularity: 2% [?]

HK shares rally for 5th month, up 3% on week. Both markets recorded another month of hefty gains in July, the seventh successive monthly gain for Shanghai and the fifth winning month for Hong Kong, fuelled by positive earnings momentum and analyst upgrades. In the absence of a major disappointment in US economic data due next week, or in corporate earnings that will continue to trickle in through August, analysts expect the stock markets to continue their upward trajectory. China’s 4 trillion yuan (US$585.5B ) stimulus package, unprecedented lending growth and stabilising economy have helped to propel a more than doubling of the Shanghai index from last October’s two-year low and fuelled a 43 % surge in Hong Kong shares

Popularity: 2% [?]

As regular readers would know DRYS is has been one of my favorites for some time, both myself and Paul have published a number of research articles on this one including a report on how DRYS was trading well behind the Baltic Index. DRYS and GE marked our financial services divisions first “house trades” over the last few months and Buzz Inc has good sized positions in both.

DryShips Inc reported better than expected quarterly earnings, helped by the recent rise in spot charter rates that the Baltic Index indicated 2 months ago. Drys also seen an increased contribution from its offshore drilling segment. Read more

Popularity: 2% [?]

Goldman Sachs and JPMorgan Chase Co. have emerged two bellwethers of the US finance sector in the post-bailout Wall Street, leading the surge of optimism with their strong profits in the Y 2009 Q-2. Six major US banks have reported their second-quarter profits in the past two weeks, vastly beating analyst predictions. The business of Goldman has little to do with common consumers, its quarterly earnings of more than US$3.4B posted were buoyed by record results in its trading and underwriting business. According to the quarterly report, the Wall Street giant generated a record US$6.8B in revenue from fixed income, currency and commodities trading during the quarter. Revenue from equity underwriting jumped to US$736M form UD$ 48M in the first quarter compared with US$616M last year. JP Morgan Chase, the largest US bank by market value, posted a US$2.72B earnings, and made its profits mainly from investment-banking services including bond and equity trading, and underwriting debt to help companies issue shares and bonds, not commercial loans and consumption credit.

Popularity: 2% [?]