The Correct Call

J.P. Morgan Chase (JPM), the relative golden boy of the financials, is dropping almost 7% after it said its mortgage losses in the current quarter are higher than last quarter’s figures. Last night the company said in an SEC filing that losses in the credit markets are about $1.5 billion so far this quarter, already $400 million more than last quarter’s total.

I don’t think anybody thought that these kinds of headlines were behind us, but it is never good for the stocks when they hit the wires. Still, the Ultra Financials ProShares (UYG) are down “only” 5%, when in the past, this kind of news was easily good for double-digit losses. It remains to be seen how much bad news is priced in. As always, keep looking at the market for clues. It knows better than any talking head.

Tags: Aggressive investors, analysts’ expectations, call options, earnings surprise, earnings surprises, hot sector stocks, Investment Calendar, Stock Picks, Trading Earnings, Trading Ideas, Trading on earnings

This entry was posted on Tuesday, August 12th, 2008 at 10:39 am and is filed under Stock Market Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.