U.S. stocks improved early Thursday after JPMorgan Chase kicked off earnings season by reporting better-than-expected profits and some good news on jobs and retail sales were released.
JPMorgan said its net income rose more than 10%, as the bank reported second-quarter earnings of $1.27 per share on revenue of $26.8 billion–which topped the Street consensus forecast of $1.22 EPS on $25 billion in revenue.
On Friday, Citibank plans to release earnings before the markets open. The average estimate of analysts is for profits to move up about 8% from the year-ago quarter. Over the past three months, the average estimate has moved down from $1.01 to $0.97.
U.S. banks have been facing tougher capital requirements, other new rules and weaker trading in the second quarter, say analysts such as Richard X. Bove of Rochdale Securities LLC.
Banks, though, won’t sell shares to raise capital as their stock now trades below book value, Bove says, and thus have been shedding jobs. Bank of America, he says, is particularly undervalued.
In terms of overall corporate earnings and the markets, some analysts see a decidedly mixed picture. “In many ways, the second quarter of 2011 looks and feels similar to the same period last year,” explained Nathan Behan of Prima Capital Holding in a report on the second quarter.
However, Behan points out, global growth–especially in the developed nations–has hit a “soft patch” after a good first quarter. Plus, the global political economy has “drastically changed from a year ago,” with inflationary pressures coming to the fore.