By Matthew Kerkhoff
Stocks have been slowly grinding higher as investors realize that estimates going into earnings season may have been set too low.
Wall Street is a game of expectations, and corporate management teams understand this well. There is a long-standing habit of providing conservative guidance, allowing analysts to lower their estimates, so that companies can easily hurdle these figures. Call it sandbagging or whatever you like, it’s common practice because hey, who doesn’t want to look good by beating expectations? It’s the old “promise low, deliver high” mentality that persists everywhere.
Yesterday, JP Morgan, the nation’s largest bank, kicked off bank earnings season with a solid performance. They beat on both the top and bottom lines, and posted record investment banking revenues. This all in the face of persistent low rates, which can hinder the ability of banks to make money.
JP Morgan also announced an increase in its dividend, which may ... Log in or subscribe to continue reading.