Markets today were in “light volume pullback mode” as people try to figure out what is in store for the week ahead. The Dow closed the day down 54 points to 18,253. While Octo- “beer” is associated with Germany’s Oktoberfest is is also a rough month for stocks and with uninspiring economic data and an upcoming Presidential election most gurus are looking for volatility to increase.
European banks continue to struggle under NIRP (Negative Interest Rate Policy). The latest bank to downsize is ING which announced massive layoffs and cost reduction measures in The Netherlands and Belgium. The bank said it will post a billion dollar loss this quarter. This follows a similar trend by Deutsche Bank, ComerzBank and many of the Italian and Greek banks. John Cryan, CEO of Deutsche Bank will be in Washington DC this week and rumors swirl that he will settle with the DOJ and hopefully lower the fine from $14 billion to under $6 billion. Meanwhile 13 past and present executives from DB and other European banks have been ordered to stand trial for alleged financial crimes. While all involved deny any wrongdoing the news clearly shows that banks in Europe are in the crosshairs unlike here in the US where banks are loved and respected by all. Especially Wells Fargo!
Crain’s Seattle news service posted a CBS article about the recent record income gains in the US economy. The report showed that while the gains were good the income level is still below what it was in 2000 and 2007 and that due to “sector – inflation” many people and small businesses in the trenches continue to struggle. Sector – inflation is refers to localized increases in health insurance costs, rents and taxes. A case in point is being played out in Minnesota where the individual ACA exchange will allow insurance companies to jack premiums 50% to 67%. According to a Bloomberg article the state’s insurance commissioner said the individual exchange is on the “brink of collapse”. This once again shows the spotty or “sector” nature of our current economic situation.
Oil today closed up slightly at $48.67 while gold eased $2.50 an ounce to $1,314.