Friends
For the second day in a row stocks got off to a good start and were able to hold onto the gains throughout the trading session. The spark appeared to be the earnings report from JP Morgan Chase which propelled shares of financial institutions (you know, the ones that had been basically left for dead) which were the leaders of the move to the upside. Despite a less than stellar retail sales report, this afternoon’s beige book release showed few surprises. The FOMC described consumer spending as moderate, and declared that the labor market continues to improve. The committee declared the factory sector activity as getting better, which would seem likely since it’s been such a recent drag. Pricing pressures continue to wane despite oil’s modest increase, but there does seem to be a hint of wage pressure (the Fed is hoping for more than a hint, by the way). All in all, the beige book report shouldn’t change anyone’s opinion on future Fed action.
As for stocks, by the close the Dow Jones Industrial Average was up 187 points to finish the day at 17,908. The S&P 500 was up 20 points to close at 2082. Gold was down $15 to trade at $1,245 per ounce, while oil was down $.62 to trade at $41.55 per barrel, WTI.
The financials were the story today, namely the big banks led by JP Morgan Chase. Expectations were so low, the bar was not a difficult one to clear. Nevertheless, it seems that any major advance from these levels will need some participation from the financial sector. Energy shares have perked up a bit in 2016, now if the financial sector can recover some the bears might have to rethink their negative stance. Of course, we have a long earnings season yet to unfold, so we won’t make any declarations at this point in the proceeding. Stay tuned.
Have a nice evening everyone.
