Our old friend Mr. Dow Jones ended the day off 51 points to 18,086. The good peeps over at IBD said trading volume was very light and that markets remain under pressure. Q3 earnings are well underway and as soon as it is over we will head into the presidential election so expect some volatility and mud in the forecast.
Bank of America rounded out the earnings reporting season for the “big banks” by knocking the cover off the ball as both top and bottom lines came in well above what the gurus had expected. BAC experienced 3% loan growth coupled with a 17% increase in trading revenue and its book value rose by 8%. Cost cutting continued albeit at a lesser pace since most cost initiatives are now winding down. Revenue came in at $21.64 billion and profits were a cool $4.45 billion. While Deutsche Bank looked on in envy the markets responded to such a raw display of financial strength with a big yawn as shares fell 5 cents.
There are two differing views of the health of shopping malls in America. One view is that malls are doing fine and the International Council of Shopping Centers is forecasting a 3.3% sales increase this Christmas. The view by Morningstar Credit ratings however says malls in America are getting mauled because the shift to online sales. Morningstar says that 5% of malls are in default and 45% have weak sales. 29% of malls are doing well because they are in affluent areas and have anchor stores like Nordstrom, Saks and Bloomingdales. Malls that are vulnerable tend to have anchor tenants that include JC Penny, Macy’s and Sears. Foresters call this “site indicator species”. Someday I expect to have malls with an Amazon drone landing pad. This will be right next to the Cabela’s where you can test your skeet shooting ability before you purchase that new Mossberg. Cabela’s will also offer the Samsung Galaxy 7 fire starters to all you grilling enthusiasts.
Gold was flat today and oil slipped back below $50 per barrel.