Friday Night's Show Highlights:
The best trade of the week: Consider Bank of America! BAC!
Friday, April 11, 2014
NOTE: Monday night's show could not be posted due to technical errors with the show's recording.
Jim: Tumultuous... dramatic... nauseating. You pick the word. It doesn't bother me. That's what it felt like today, a real mauling, with the Dow diving 143 points. It was a brutal end to a bruising week, one that featured a couple of up days... remember those... for the bulls, paired however with some stupendously hard ones that more than wiped out the positive sessions.
Today could have been a lot worse, considering that J.P. Morgan, the big bellwether financial, reported a truly ugly quarter. J.P. Morgan rarely misses. This was a terrible effort, contrasted particularly by Wells Fargo, which gave you a terrific number, and roared higher before being tempered like everything else at the end of the day.
J.P. Morgan stands as a reminder that the minefield of earnings season is now in front of us and that, if a quarter is terrible, a stock is going to get hammered mercilessly, no matter how much good history there might have been before it came.
Which brings me to our Game Plan for next week, a week shortened by the Good Friday holiday, that's still chockablock... I always wanted to say that word... with earnings. It starts with Citi. Citi reports Monday and, given that it's notoriously flunked the government's test for returning capital last month, you'd think the quarter's going to be awful, especially after the J.P. Morgan debacle. I think that's probably going to be wrong. But more important, it doesn't matter, because this market's in love with dividends. More on that later. And Citigroup's not able to give you one. That's what's so horrendous about Citigroup's failing grades. There's no cushion. There'll be a cushion in J.P. Morgan when it gets to over 3% yield, where I think it's headed. But the selling in this one? Which is only a buck and change off the 52-week low? It seems overdone, but you must remember that we've had a big interest rate decline. Awful for bank earnings, intraquarter. So whatever number you see, I think the next one's going to be even worse. No buyback, no dividend, little earnings growth. In other words, stay away. Tuesday, we get a couple of tests of the "I love low...