Wednesday saw another day of weak-handed selling, with the low-volume day punctuated by a nearly 1% decline in financials as Wall Street braced for today’s slate of bank earnings. The Dow Jones Industrial Average dipped 0.3%, the S&P 500 finished 0.4% lower and the Nasdaq dropped 0.5%.
But perhaps Thursday won’t be all that bad, considering JPMorgan Chase & Co. (NYSE:JPM) has landed on our list of stocks to watch thanks to blowout earnings. Meanwhile, Advanced Micro Devices, Inc. (NASDAQ:AMD) and ConocoPhillips (NYSE:COP) are making headlines of their own.
Here’s what to look for in Thursday’s trading:
Advanced Micro Devices, Inc. (AMD)
AMD shares are headed solidly lower again on Thursday, but this time, there’s no real catalyst other than more time to think about the negative drivers hammering the stock of late.
Advanced Micro is now off nearly 10% (and soon to be more) following Goldman Sachs analyst Toshiya Hari initiating shares at “Sell.” To recap, Hari said that despite the fact that AMD’s “execution (i.e. new product launches, cost management and [balance sheet] deleveraging) has improved under CEO Lisa Su, we believe current risk-return is unfavorable.”
He added that AMD was “priced for perfection,” and that competition from Nvidia Corporation (NASDAQ:NVDA) and Intel Corporation (NASDAQ:INTC) was still a viable threat.
That announcement quickly sent AMD stock off a cliff, with shares buckling below both the 20- and 50-day moving averages. The stock has been unable to recover since then. Any strength was abandoned on Wednesday, when Advanced Micro was sent more than 2% lower with little resistance through the day.
AMD is off another 2%-plus this morning, and with little else in the way of near-term catalysts on the radar, bulls simply have to hope for a broad-market upswing to help improve the chipmaker’s fortunes.
JPMorgan Chase & Co. (JPM)
JPM shares are starting to crawl higher this morning on a massive first-quarter earnings beat.
JPMorgan posted revenues of $25.59 billion for Q1, topping expectations of $24.88 billion. That was driven largely by a billion-dollar beat in trading revenue, with $6.52 billion clearing a bar of $5.51 billion. That funneled down to EPS of $1.65, which easily bested expectations for $1.52.
That trading revenue was heavily influenced by a boost in bond trading, which was up 17% year-over-year to $4.22 billion. Conversely, revenue on the equity end, while still up, gained more modestly at 2% to $1.61 billion.
Also promising was an improvement in return on equity, which grew from 9% in last year’s Q1 to 11% this year.
“We are off to a good start for the year with all of our businesses performing well and building on their momentum from last year,” CEO Jamie Dimon said.
JPM stock is up about 1% in premarket trade.
ConocoPhillips (COP)
Lastly, COP is trading flat as the market digests its decision to sell a big asset for up to $3 billion.
ConocoPhillips said this morning that it will sell assets in the San Juan Basin — where it produced 124,000 barrels of oil equivalent per day, about 80% of which was natural gas — to a Hilcorp Energy affiliate for $2.7 billion in cash. The deal also includes a contingency payment of up to $300 million over the course of six years, beginning Jan. 1, 2018.
“Including our recently announced Canadian asset sales, we have line of sight to more than $16 billion of total considerations in 2017,” said CEO Ryan Lance in a statement. “These transactions will materially reduce our exposure to North American gas and achieve an immediate step change improvement in our balance sheet and cash margins, while accelerating our return of cash to shareholders.
The company said the net book value of the assets was about $5.9 billion as of Dec. 31, 2016, and it will record a non-cash impairment on them in Q2 2017.
COP stock is trading slightly lower on the news — reflective of its year-to-date movement, as it has listed nearly 2% lower.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.
