Two Ways: JPMorgan Cuts Dividend
Strengthen your portfolio in good times and bad.
Extraordinary Times, Extraordinary Measures
JPMorgan Chase (JPM) cut its dividend last night by 87%, from $0.38 per share to $0.05 per share. CEO Jamie Dimon explained in a statement that extraordinary times call for extraordinary measures, and that the move is aimed at strengthening the company's balance sheet "even if conditions worsen significantly."
By retaining the $0.05 payout, at least for the time being, it's expected the bank will be able to hold on to an additional $5 billion in common equity per year. The market seems to like the news: Shares of JPMorgan are up 5% in pre-market trading.
Banking bears should check out Professor Adam Warner's SKF Wags the Dog.
From the Bull Pen: The markets may actually praise the move, but far too much uncertainty surrounds the banking sector to be a bull. Instead, one can attempt a play in the broader indices using the Ultra QQQ (QLD) for a short-term trade. A sell stop can be set 2% below entry.
From the Bear Cave: For a longer-term trade, bears can consider playing the downside in financial-in-drag General Electric (GE). The stock could rally to $11.50, providing bears with a better entry.
Quick Check Around the World
Asian trading closed with the Hang Seng -2.86%, Nikkei -1.46%, Taiwan -1.06% and Shanghai -4.56%.
Glancing towards Europe, we see the CAC -1.13%, DAX -1.73%, FTSE -0.86%
As of 8:00 AM EST, S&P Futures are trading +7 to 752, and Nasdaq futures are +4 to 1140.
A Look At Commodities
Crude oil is trading -0.10 to 38.34. Gold is -5.60 to 989.40. Silver is -0.90 to 14.360, and copper -0.15to 143.55.
The dollar index is -0.0850 to 87.3450.
On the Radar
09:00 S&P/CaseShiller Home Price -24.00
09:00 S&P/CS Composite 20 YoY
09:00 S&P/Case-Shiller US HPI
10:00 Consumer Confidence 36.0
10:00 House Price Index MoM
10:00 Richmond Fed Manufacturing 36.0
10:00 Bernanke Report on Economy & Fed Policy
10:00 House Price Purchaser Index
Click here for the full trading radar.
Turnaround Tuesday strikes again? We shall see. Good luck!
Actionable ideas, instant analysis. Real-time from bell to bell.
Minyanville's Buzz & Banter - 14 day FREE trial
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter