Wells Fargo Shows Not All Banks STruggling
Some strong earnings reports are helping the market get a small boost in early trading, but we need to see a much bigger rally to even make a dent in the recent declines.
Wells Fargo (WFC) topped earnings expectations, and also raised its dividend, the ultimate statement that your capital position is strong. The 5th largest bank in the U.S. raised its dividend 10%, the 21st consecutive year it has raised its payout ratio. WFC showed that not all banks made so many silly loans as to wreck their entire franchise. The stock is spiking +23% on the news, a huge move.
Other solid earnings reports included Abbot Labs (ABT), Intel (INTC), and Schwab (SCHW).
Oil had a big move lower yesterday, falling more than $6, its biggest move in years. Today, higher inventory data is further pressuring crude prices, which are now down another $5 to around $133.50. Lower oil prices should help improve sentiment in the broader market, and ease inflation concerns.
It is no secret that food and energy prices have risen a lot recently, and that data flowed through to today's CPI report. June CPI rose+1.1% (vs. +0.7% consensus), which pushed the year/year figure to +5.0%. That marks the largest jump in inflation since 1991.
Asian markets were mixed overnight, and the dollar is mixed this morning. Gold is trading lower, likely in sympathy with oil. The 10-year yield is higher at 3.91%. And the VIX is falling another -5.3% to 27.03.
long WFC in some client accounts