What was looking like a positive day has taken a turn south as a weak earnings report from JPMorgan Chase (JPM) has put investors in a more defensive mood.  This afternoon’s Brexit vote in the UK is also likely to cause volatility as we approach the close.  In economic data, PPI for December came in weaker than expected while Empire Manufacturing for January also missed.  Read today’s Bespoke Morning Lineup below for major macro and stock-specific news events, updated market internals, and commentary.

Bespoke Morning Lineup – 1/15/19

We’ve gotten a handful of high profile earnings reports this morning, and the pace will only pick up as the week goes on.  Of the companies reporting this morning, though, the results have been mixed.  While Delta (DAL) and UnitedHealth (UNH) both exceeded forecasts on the top and bottom line, JPMorgan Chase (JPM) came up woefully short in terms of both earnings and revenues.  The more important thing to watch, though, is how the stocks react, and given the size of JPM’s miss, the reaction could have been worse.  As of this writing, it is trading down just 2%.

As with every earnings season, one of the most important metrics to watch is not necessarily how the companies report relative to expectations or even guide, but how their share prices react to earnings.  So far this earnings season, the results haven’t been great.

The chart below shows the one-day share price reactions for S&P 1500 companies reporting YTD (through Monday).  It’s a relatively small sample size (22 companies), but the median returns of companies reporting have been negative.  While the stocks have collectively seen a modest (and we mean modest) pop of 0.08% at the open, the median change from the open to close has been a decline of 1.67% for a median one day drop of almost 2%.  This isn’t a very encouraging start, but at this point in the last earnings season, the median one-day decline of stocks reporting EPS was closer to a decline of 4%.  So, it could be worse.

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