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Why Can Stocks Fall When They Beat Earnings Expectations? Jim Cramer Explains

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Sometimes, no matter how strong an earnings report, a stock just can't win in Wall Street's eyes.

Real Money Stock of the Day JPMorgan (JPM) - Get JPMorgan Chase & Co. (JPM) Report fell in early trading after reporting net income rose by 16% to $9.65 billion, putting earnings per share at $2.82.

 "We had a strong second quarter and first half of 2019, benefiting from our diversified global business model," CEO Jamie Dimon said in a press release. "We continue to see positive momentum with the U.S. consumer -- healthy confidence levels, solid job creation and rising wages -- which are reflected in our Consumer & Community Banking results."

 So why does a stock fall after better than expected earnings.

 When it comes down to it, Jim Cramer said an "initial reaction is often the wrong reaction."

 Watch the video above for Cramer's full take which includes examples from PepsiCo (PEP) - Get PepsiCo, Inc. Report and Caterpillar (CAT) - Get Caterpillar Inc. Report .

 Related. JPMorgan Is Seeing Profit-Taking Tuesday Following Its Q2 Earnings Numbers

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