90% of the S&P 500 has now reported earnings, so maybe the market is waiting for the next “event” or catalyst before it resumes its upward trend. Or is it a reason to just sell and stay away for a while? The financials look exhausted and may have experienced a top the other day. Why? 69% of bank earnings estimates for the third quarter have been revised downward. Names like Zion and Comerica just had 50% knocked off there future outlook. KRE, the regional bank etf, has been trading like a biotech lately and it is certainly one to watch as a possible short entry if you still believe toxicity reigns supreme. I know I do.
Shanghai stocks slumped 4.7% overnight, BHP reported a 67% slide in net profits and ING profits took a 96% hit because of real estate exposure. What ever happened to a small miss? Nestle missed, and they now say they won’t make their target. I realize that “food fad” is such a high ticket discretionary item.
The Treasury is selling $23 billion in 10 year notes today and we have the Dept. of Energy crude inventories at 10.30. Bernanke gives his rate decision around 2pm and that part of the day will take center stage.
The Fed must communicate enough inflation fighting language to depress long term yields while not adding to short term pressures for market tightening. Therein lies the rub.
Have a great day.