We had yet another pretty uneventful day yesterday. Yes, the S&P rallied 13 points and the Nasdaq rose more than 1%, but they both had negative breadth and volume remained very low. (The composite volume was higher than Friday and Monday, but at 2.5bn shares it was still very, very low.)…..The moves WITHIN those broad averages was led by the bond market. Although the inflation data in the morning was slightly above expectations, it was still below the whisper numbers and it cause the Treasury market to rally…and thus took long-term interest rates lower. This, in turn, helped the large-cap tech names to rally…and caused the bank stocks to take it on the chin.
Speaking of the banks, the earnings season for these names began this morning…and we’ll get a deluge of earnings from this group over the next few days. This morning’s releases have Goldman’s shares trading higher…but Wells Fargo’s and JP Morgan’s shares are flat-to-lower. It will be interesting to see how the group acts over the next week or two. The bank stocks always seem to get hit when they report their earnings…even when they beat expectations (like they did with this morning’s reports). However, once we get past their numbers (most of which come-out at the very beginning of earnings season each quarter), the group tends to stabilize. Therefore, once we get past the next few trading days, the group should go back to trading based on the movements in the 10yr yield and the yield curve in general…..In other words, we’ll get a better idea of how this group will act as we move through the rest of Q2 over the next two weeks…rather than over the next few days.
Of course, most of the focus will be on the first day of trading for ...
