Stocks closed the trading week flat but on a significant increase in volatility. The Dow fell 88 points to 18,123 on Friday in a heavy volume trading session. The tech heavy NASDAQ also fell hard despite strong performances by Intel (which raised its guidance) Apple (strong phone sales) and Amazon (two analysts raising their target price to $1,000). Last week, the Dow lost 2.2% for a year to date return of 3.8% and this week the Dow looks to have held steady but is flashing signs of low volume upswings and high volume down drafts.
The US Labor Department, which seems to be experiencing bracket creep by now regulating IRA’s, has released its consumer Price Index for August showing a 0.2% increase. The CPI is up 1.1% over the past year. Prices rose more than expected as rents and healthcare cost increases offset a drop in gasoline prices. As of late, food prices are falling so it will be interesting to see how this reading comes in next month but for the time being inflation remains well below the Fed’s target rate of 2%.
Deutsche Bank took a big hit today falling about 9% after the US slapped it with a $14 billion fine related to the 2008 mortgage crisis. The bank responded to the news by vowing to not pay this unjust tax. Given that the current market cap of Deutsche Bank is only $18 billion the fine is significant. What is interesting to me however is that the amount of the fine matches the amount of back taxes the European Union levied on Apple. Could the action today by the US Department of Justice be retaliation for what the EU did to Apple? Only Jack Lew’s hair dresser knows for sure.
WTI crude oil finished the week at $43.22 down 1.5% for the day.