Question on Banks

What’s in Today’s Report:

  • Subscriber Question on Banks
  • EIA’s Short Term Energy Outlook Analysis
  • Dollar Technical Update

Despite a handful of headlines regarding trade and emerging markets overnight there were no material macro developments leaving US futures, the dollar, and global shares little changed overnight.

The EU’s Juncker jawboned about trade o/n (but no policy change) and the Turkish Central Bank are set to raise rates tomorrow, but neither was a surprise or moved markets materially.

Economically, Eurozone Industrial Production fell -0.8% vs. (E) -0.5% in July pointing to a disappointing slowdown in Q3 manufacturing growth.

In the face of the recent dollar strength, investors were hoping to see better economic data in Europe rally the euro and pressure the dollar, but that is unfortunately not playing out so far in Q3.

Looking ahead to today’s Wall Street session, there is one inflation metric to watch: PPI (E: 0.2%), but unless it is a big surprise, it will likely be shrugged off ahead of the CPI report tomorrow. Additionally, there is one Fed speaker today: Brainard (12:45 p.m. ET).

With a lack of any notable, scheduled catalysts, focus will likely remain on US tech shares and any trade developments (and their subsequent influence on the dollar). As long as tech trades ok and the dollar doesn’t materially rally, stocks broadly should be able to continue to drift higher this week.

Read the detailed analysis here.