Stocks rebounded from yesterday’s Deutsche Bank selloff with a Deutsche Bank rally. The Dow jumped 165 points to 18,308 on lower volume. For the week the Dow gained about 45 points or a quarter point but is holding up well and, according to IBD, still in rally mode despite the increased volatility. For the month of September the Dow lost about a half of a percent.
Shares of Deutsche Bank rebounded 14% today as regulators, bank executives and some analysts came to its rescue saying that the bank has good capital levels and is not in danger of collapse. Market guru Mohamed El-Erian agreed with that sentiment but he said the stress on DB is a reminder to investors that if they invest in this region they will face dilution risks and economic risks as the whole of Europe continues to face headwinds. Europe is struggling as Spain does not have a gubment, Greece does not have any money, Italy does not have an adequate bank rescue fund and after voting for it, Britain cannot seem to find the “Brexit” all while immagrants are looking for the entrance and the 370 per month euro stipend.
Costco (“Costco’s” as my mother in law called it) reported good numbers today sending shares higher. Both sales and profits were up 2% beating estimates.
In Economic news, personal spending remained flat in August while incomes rose 0.2% and inflation rose 0.2%. Peter “Boockvar Willie” Boockvar with the Lindsey Group commented on CNBC that “Wage growth is still mediocre, spending is as well because healthcare takes up a larger portion of a household’s budget (along with rent for those that do). As for inflation, expect headline prints to continue to rise in coming quarters with the stabilization in oil prices on top of sticky services inflation,"