BlackRock (BLK) stock was surging Tuesday morning in pre-market trading, up 25.65 points (4.17%) to 640.51 as of 7:35 am ET.
The world's largest asset manager, largest US landlord, and designated bond buyer for the Federal Reserve reported better-than-expected earnings. Third-quarter earnings grew 29% to $9.22 a share, up from $7.15 a share a year earlier. Analysts were looking for the company to post earnings per share of $7.77, but the company benefitted from additional fee income and a increase in assets under management (AUM), now pegged at $7.81 trillion, up from the $7.32 trillion in the second quarter and $6.96 trillion a year earlier.
Revenue grew 18% to $4.37 billion, topping the FactSet total revenue consensus of $3.94 billion.
Also reporting prior to the opening bell, JP Morgan said earnings for the three months ending in September were $9.4 billion, or $2.92 per share, up 9% from the same period last year and well ahead of consensus forecast of $2.22 per share.
Stunning was the revelation that JP Morgan's credit loss provision for the quarter rose by a mere $611 million, a minuscule figure compared to the massive $10.5 billion booked over the three months ending in June. Expectations were for the largest US bank by assets to set aside somewhere in the range of $1.8 billion to as high as $6 billion.
Shares of the bank's stock were sharply higher in pre-market trading, coming on the heels of a major upswing Monday. JPM was a point higher on Monday and it looks to add to those gains when regular trading resumes on Tuesday.
While BlackRock has put in an impressive run this year, with shares up 22.3% since December 31, 2019, JP Morgan has not done quite as well. Its price was slashed in the February-March crash, though it has regained some of those losses. Still, Jamie Dimon's firm is down 26.5% year to date.
Monday's rally took the major indices a step closer to all-time highs. At Monday's peak, the Dow Jones Industrial Average was within 50 points of 29,000, a level it's pierced only once since the March lows (September 2, 29,100.50), The all-time high of 21,511.42 (February 12) once agin appears to be within range, less than three percent off that target.
The NASDAQ is within 1 1/2% of its record close of 12,056.44 from September 2nd of this year. Also making its record close on 9/2 was the S&P 500 when it settled out at 3,580.84. It too is less than 1 1/2% from achieving another record high.
The NYSE Composite, which, like the Dow, has lagged the other two indices, needs to gain another six percent to overtake its February 12 record close of 14,136.98.
If earnings for other major corporations show as well as the two financial behemoths which reported Tuesday, record highs could be a shoo-in prior to the November 3 election, a big plus for President Trump, as he seeks a second term.
With stocks soaring and the threat of another round of lockdowns becoming less and less likely, it's going to be difficult for challenger Joe Biden to make a case for his Democrat agenda, which includes a nationwide mask mandate and up to a three-month economic lockdown.
The polls employed by the mainstream media have Biden leading comfortably nationwide and in the electoral college, though other indicators and polls less publicized have Trump winning handily. A repeat of the on-air crying and teeth-gnashing by left-leaning TV anchors and reporters is a real possibility.
At the Close, Monday, October 12, 2020:
Dow: 28,837.52, +250.62 (+0.88%)
NASDAQ: 11,876.26, +296.32 (+2.56%)
S&P 500: 3,534.22, +57.09 (+1.64%)
NYSE: 13,324.87, +72.25 (+0.55%)
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