Stocks moved higher with the Dow gaining 141 points on mixed volume to end the day at 24,207. Stocks were led higher by a surge in banks and index levels are back to the 50-day moving average. While IBD is in rally mode, BTS indicators remain in cash but are leaning toward a reentry into high yield. “Dan the man” over at BTS noted there is concern in the markets over trade and slower growth abroad as Brexit turmoil hits Europe and trade news hits China. On the flip side the Federal Reserve has become more dovish which may help sustain the current market levels. BTS continues to hold cash but if volatility levels drop further it might indicate that the current bounce will be sustainable.
Bank earnings continue to roll in. Bank of America reported stellar results with a revenue gain of 18% and an increase in net income of 49%. Loan growth was good, and gains in net interest margins and wealth management offset a decline in global trading revenue. Both top and bottom line results beat guru estimates and shares gapped higher at the opening.
Oil prices have risen as of late with WTI crude trading at the $52 per barrel level. The EIA said Tuesday that U.S. output will rise by 1.14 million barrels per day to 12.07 million bpd this year and grow by an additional 790k bpd in 2020. In short, US producers are crushing it and the US has become a net exporter on a consistent basis.
Eddie Lampert seems to have prevailed in his bid to keep Sears alive. Fast Eddie won a bankruptcy auction with a bid of $5.2 billion smackers gaining control of the 126-year-old retailer/Amazon roadkill. The deal will preserve 45,000 jobs and 425 stores. It will be interesting to see how this plays out. My guess is that Fast Eddie will fix it up and then in 3 years sell it at a profit.