Crew Capital Management Thoughts on Investment

Welcome to the Crew Capital Management Thoughts on Investment blog. At Crew Capital, investment education is key to how we work with our clients. We hope our conversation and analysis entice you to think further on your investment strategies and planning. For further discussion, please contact us at rjung@crewcapital.com

Thank you!
Robert F. Jung, CFA CPA*

*CPA inactve

Monday, July 28, 2008

Second-Quarter Earnings Update

As of July 23, about 38% of S&P 500 companies had reported second-quarter earnings — including most of the major Financials. Earnings thus far are down 28% from the second quarter of last year, due largely to a 97% decline from Financials. Some broad trends have emerged from banks. First, revenues have generally held up better than we expected this quarter. The steeper yield curve has helped net interest margins and many banks are still growing their core loan portfolios (though they are downsizing the balance sheet overall). Banks with diverse sources of fee revenue have held up best. Expense discipline is also muchmore evident this quarter as deep staff cuts and cancelled or delayed capital investments are starting to bear fruit. But those positive trends are being overwhelmed by broadening deterioration of credit, especially residential mortgages and related commercial loans. Losses, problem assets and loss reserves continued to increase at a rapid, and in many cases accelerated, pace.


Source: Argus Research Market Watch, July 28, 2008
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