We have been waiting to clear the Trade War noise and get to the meat of what will really drive the market view this summer; that is earnings season and the expectations therein from analysts and investment firms.
See this post at Biiwii for a look at how it is starting off for the Financials sector.
It is by my friend Tim Knight, a perma-bear if ever there was one. But in this case, it is what it is, a simple post showing what we had hoped to see as an indicator that things could get rough this summer. Banks are getting woodshedded on earnings. [edit] Tim’s charts make things look dramatic. The actual activity, post-open is just down, not cataclysmic. It’s a hint at this point.
The banks are pro-yield and a continued decline in yields this summer (regardless of a still in play potential bond bear market out ahead) could go with a lurch to risk ‘off’ in asset markets. The banks could lead that.
It’s just one data input on one day. But I thought it relevant. We’ll develop the case going forward.
