- Wells Fargo, which does not have an investment banking business like the aforementioned JP Morgan and Morgan Stanley, reported dismal earnings and fell around 2.5%, reversing some of the gains of the financial sector yesterday as Wells Fargo is the largest bank. The bank was especially adversely affected by low interest rates, according to the WSJ. This contributed to the sluggish market performance today.
- The VIX is down 1.17% today, showing that volatility and therefore fear is lower in the markets. The VIX is now at 12.67, a very low level. This contributed to the fall in bond prices and the large increase in 10 Year T-Note yield (up 4.18% today) as investors pursue the now less risky stock market instead of the low-yielding bond market.
- Retail sales rose a higher than expected 0.6% in June according to Bloomberg, offsetting weak vehicle sales in the US. This economic indicator shows that consumer spending is still strong and possibly canceled out the negative effects of weak financial earnings today.
This has been my last daily bulletin. I hope they have provided some information as to why the market is moving for the past three weeks.
– Michael Trehan