Stocks to Sell: JPMorgan (JPM)
Click to Enlarge One of the main reasons the Q1 earnings season has been so disappointing has been the underwhelming results from the big banks — who carry a lot of weight on the overall S&P 500 blended earnings per share numbers. As a result, the Q1 blended EPS growth rate has fallen to -1.1%, a far cry from the 4%-plus growth that was expected in January.
JPMorgan (JPM) is at the center of the problem, reporting a massive 68% drop in mortgage activity, a drop in bond trading revenue and less ability to pad earnings with releases of loan loss reserves.
JPM shares dropped to support at their 200-day moving average, and have skidded along for a few days, but now look ready for another down-leg. I’ve recommended the May $55 puts to my Edge Letter Pro clients.