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First Quarter Results: Turn around or false signal

Posted April 22, 2008

“Most investors realized that earnings season would be dismal; so when the results came in (pretty much) as expected, many investors seemed to find that the news (especially among financials) was not worse and went on a buying spree.” — William Patalon

Blogger’s note: Financials like JP Morgan (JPM: NYSE) and Citigroup (C: NYSE) announced their first quarter results to a crowd of hopeful investors last week. And they didn’t disappoint, or more accuarately, they only disappointed as much as Wall Street expected them to disappoint. William Patalon parsed the current situation in U.S. markets, explaining to his Money Morning readers whether this is a first step or a false signal for investors. And I thought you’d appreciate a look. You can find the article here or read on for more.

by William Patalon, Money Morning

Baltimore – (TFN): It’s earnings season again. But with an odd twist.

You see, most investors realized that earnings season would be dismal; so when the results came in (pretty much) as expected, many investors seemed to find that the news (especially among financials) was not worse and went on a buying spree.

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By watching the trading “tape,” you almost could “hear” what investors were thinking:

  • JPMorgan Chase & Co. (JPM: NYSE ) announces a 50% decline in first-quarter profits, and says markets will remain weak through the rest of this year and perhaps into next: No problem. As bad as the results were, they were actually better than Wall Street expected.
  • Citigroup Inc. (C: NYSE) says it lost $5.1 billion on a 48% decline in revenue… Read on to learn more.

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