Not much conviction displayed today by bulls or bears, with major stock indexes finishing marginally mixed. Bears couldn’t gain any firm advantage off another downward revision to 1Q GDP, and bulls couldn’t capitalize on a slightly better-than-expected consumer sentiment gauge and frisky euro.
Speaking of the euro, US stocks seemed tethered to the single currency for much of the session, with some momentary disconnects early and then late in the day. At times, they display the type of synchronization that would make a drill instructor proud.
Aside from the encouragement provided by the euro, bulls may’ve been a bit disillusioned by the recent stream of data suggesting a stalling recovery. Meanwhile, bears seemed hesitant to get too aggressive, lest some central bank or government fire a renminbi-like weekend surprise at them (G-20 meets). Anyway, there’s always next week and potential for more proof (or not) that the recovery is laboring.
Key data include readings on personal income & spending, home prices, pending home sales, consumer confidence, June ISM and, of course, June non-farm payrolls.
Financials soar today after overhaul bill’s finalized. That might tell you something about how toothy investors think the regulations will be. Consumer staples, telecom tumble. DJIA slips 8.99 to 10143.81, and Nasdaq Comp rises 6.06 to 2223.48. S&P 500 ends 3.07 higher at 1076.76.
Smattering of opinions and analysis coming from analysts, bloggers and government officials after lawmakers finally agreed on a sweeping financial regulatory reform bill that’s intended to help prevent future crises.
Unfortunately, there’s a growing sense that Wall Street is escaping relatively unscathed and should’ve been slapped with tighter restrictions.
Here are a few snippets we’ve published on the wire that offer how folks are reacting to the finance bill:
- US Chamber of Commerce blasts the sweeping financial overhaul package completed by House and Senate members of the “conference committee” after a grueling 20-plus hours of negotiations. “It is a reform bill that, ironically, lacks effective reform,” said Chamber president Thomas Donohue, who noted that the bill will just add new agencies to a “bloated” bureaucracy. “Today is a sad day for the U.S. economy.”
- Financial regulation overhaul’s provisions on capital standards could shrink a major competitive advantage that big banks have long enjoyed over small banks — especially if regulators ultimately rule that all banks must hold similar levels of capital. Big banks like JPMorgan (JPM), Citigroup (C) and Bank of America (BAC) have long been required to hold less capital than small or even regional banks. As small bankers and their advisers have long pointed out, big banks have also enjoyed lower funding costs since investors have assumed the government won’t let them fail. That could all change.
- Financial reg overhaul could cause the next financial crisis, says Stifel Nicolaus analyst Chris Mutascio. Restrictions reduce profits, and in turn increases pressure to take greater risk to generate returns, he writes. Or bill’s restrictions reduce loans to grow the economy. “Pick your poison,” he says. Banks “took it on the chin” with the financial services reform bill. “Unfortunately, the Bill does very little to address true financial reform that would reduce risk or help prevent a financial crisis that we just went through. Where was the attention to capital levels, liquidity, reserves – the essential ingredients of a safe and sound industry?”
Leaders from the Group of 20 are gathering in Toronto to discuss the state of the global economy as markets have begun reassessing the growth outlook. Markets are also focusing again on BP, whose shares are getting another hammering as the costs of the spill continue to increase. Newswires editors Madeleine Lim and Mike Reid discuss on the Markets Hub.
Heading into this week, bulls had regained a pretty firm grip after arresting a sharp correction in May. That grip has loosened significantly in the last few sessions, and the June rebound is in some jeopardy, with the major averages sitting at their lowest levels since the bounce began on June 10.
Stocks mostly lower in Asia overnight, moderately lower now in Europe. The euro’s holding up pretty well, USD index edging higher. Financial overhaul bill’s details finally appear to be hammered out. Third look at 1Q GDP due at 8:30am; Reuters/Univ of Michigan final look at June consumer sentiment out at 9:55am ET. S&P futures up 2.80; 10-yr lower, yield at 3.13%.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]
