July 13, 2018

The major stock market averages fell at the open but quickly recovered. The Dow and SPX are now up 63 pts & .12%, respectively. The telecom sector is down over 1% (see below), but most sectors are modestly higher on the day. Retailers and transports are faring especially well. European markets are poised to close higher by about .25% and most of Asia was higher overnight. The US dollar rose almost 1% this week and is now up 3% on the year. WTI crude oil is trading back up to $70.80/barrel. Bonds are trading flat yet again. 

The US Dept. of Justice has decided to appeal a federal court’s ruling which allowed AT&T (T) to acquire Time Warner (TWX). Recall that last year, the DOJ sued to stop the $85bil deal, charging that it would be anti-competitive.  Last month a district court ruled that the deal could go ahead without any conditions, and the judge even urged the DOJ not to pursue an appeal. So this is a bit of a surprise. The appeal process is expected to drag on about six months. The stock is down about 2% today. 

JP Morgan (JPM) reported solid second quarter results this morning, including 10% y/y revenue growth. The bank’s net interest margin held steady at about 2.46% but net interest income rose 10% y/y. Loan growth was positive. Investment banking revenue grew 13% y/y, surprising analysts. CEO Jamie Dimon noted a “healthy US consumer” and “good global economic growth.” He also addressed rising international trade tensions, noting that fears of a global trade war could hurt business confidence later this year. “It’s kind of affecting psyche more than it is economics. There are unpredictable outcomes when you start skirmishes like this with major countries.” The stock is up .5% today. 

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