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(Photo courtesy of Getty Images/Mark Wilson)
courtesy of Getty Images
The earnings season has begun with a bang.
JP Morgan outperformed the market, virtually tripling its earnings from the previous year. Goldman Sachs earned about 50% more than Wall Street forecasts, more than doubling its earnings from the previous year.
Keep in mind that banks have a war chest of loan loss reserves that they can use at their discretion to move to the bottom line. That suggests they have a big number of good earnings surprises in store for us over the next few quarters.
As a result, the massive beats come as no surprise. However, business is increasing, in addition to their position of strength in managing earnings. Deposits at JP Morgan have increased by 25% compared to the same period previous year. In addition, the value of investment assets has increased by 36%.
That’s thanks in major part to the country’s money supply expanding by four trillion dollars in the last year. Directly benefiting banks!
Citi, Bank of America, and Wells Fargo will all respond tomorrow.
Citi is the cheapest of the major four banks. The book value of JP Morgan is $84. The stock is now trading at $155. Citi has an underlying worth of $88. The stock is currently trading at $68. Citi is part of my Forbes Billionaire’s Portfolio (my premium membership service for Forbes members).
ADDITIONAL INFORMATION FOR YOU
In other news, another scorching inflation number was released today.
The Fed has trained the media to dismiss hot inflation data as “transitory,” based on the notion that the data is/will continue to be compared to a year ago’s very low comparative (when the economy was in lock down). They urge us to concentrate on the price shift from year to year.
The true insight, however, may be found in the month-over-month statistics. Inflation (both nominal and core) increased by over 1% in June. That’s only in a month’s time!
Furthermore, this is the third month in a row that the price index has increased by more than 1% (April +0.9 percent, May 0.7 percent, and June 0.9 percent).
Forget about last year’s comparisons. If we extrapolate this monthly data out, we can see that yearly inflation is already in the double digits.
Here’s where you can have my free daily Pro Perspectives notes emailed to your mailbox./nRead More

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