Jan 19, 2010: Citigroup, IBM, Bank of Canada, Mass. Election

The US trading week was shortened because of Martin Luther King Day, and as a result, the news is crammed into just four days, making it that much more exciting. On Tuesday, Citigroup [C:NYSE] and IBM [IBM:NYSE] released their earnings, the Bank of Canada made an interest rate decision, and an important Senate election in Massachusetts triggers drug stocks upwards. Citigroup released earnings Tuesday morning and posted a loss of $7.6B or 33 cents a share, compared to $17.24B a year ago. These results included a repayment of TARP of $6.2B, so the net loss was really $1.4B, a large improvement from last year. The company also claims that Tier 1 Capital Ratio and Tier 1 Common Ratio also improved, indicating better financial strength. The shares started off the day down 2 percent at the open, but closed higher up $0.12 or 3.5 per cent to $3.54. I am not sure as to why, but I believe it has to do with improving Tier 1 and an upgrade on 2010 earnings to break-even. International Business Machines posted earnings after hours on Tuesday, with numbers up and above analyst estimates. First call EPS shows earnings of $3.59/shr against estimates of $3.47/shr, up from $3.27/shr last year. Total revenue hit $27.23B this quarter. Big Blue is reacting slightly negative after hours, down about $2 a share to about $132 giving up gains it made throughout the regular session. In Canada, the TSX finished up almost 13 points to finish at 11,763. Earlier today, the Bank of Canada held benchmark interest rates at 0.25 per cent. The BofC also predicts the Canadian economy will grow 2.9 per cent in 2010 and 3.5 per cent in 2011. The economy shrunk 2.5 per cent in 2009. Mr. Carney says a high Canadian dollar is hurting exporters, as well as low demand from the US, Canada's largest trading partner. Rates are expected to remain flat until at least mid-year. Lastly, a Senate election in Massachusetts has driven up drug stocks in the past few days. The passing of Senator Kennedy has opened up a seat and many believe the Republican candidate will win. This is believed to put Obama's health-care bill in jeopardy. Last night Jon Stewart talked about this on his show, and I highly suggest people watch it. I am unable to embed the videos, but I have provided a link. Canadians click here. Americans click here. Later this week, I will discuss Bank of America, Starbucks, American Express, and General Electric.