- Midweek last week, the markets sold off nearly 3% on Wednesday primarily due to a spike in Covid-19 cases, but also partially to polling data on the upcoming Presidential election which shows Biden with a strengthening lead. On Thursday we saw stabilization thanks in part to news that the U.S. banking regulators unveiled a pair of rules that will make life easier for large banks with complex trading and investment portfolios. The rules would dial back the Volker Rule instituted after the global financial crisis which restricted banks from engaging in proprietary trading among other requirements. The big banks liked the news and traded higher by 3-4%. https://www.reuters.com/article/us-usa-stocks/wall-street-recoups-losses-as-financials-energy-gain-idUSKBN23W1NX
- The week finished off on the downside as the Fed’s annual stress test results for the banks showed many were close to minimum capital levels. The Fed responded by suspending stock buybacks and capping dividend payments at current levels for the third quarter. Additional negative news on the Covid-19 front didn’t help the cause. Markets traded lower by more than 2% on the day. https://www.cnbc.com/2020/06/25/stock-market-futures-open-to-close-news.html
- The equity markets are starting the week off on the positive side today as investors wait for additional stimulus in the face of rising Covid-19 numbers. Boeing is also giving a boost to the Dow Jones Industrial average as the Federal Aviation Administration gave the green light to key certification test flights for the grounded 737 MAX. As we mentioned last week, we continue to look for opportunities to hair-cut our winners.https://www.reuters.com/article/us-usa-stocks/wall-street-gains-on-hopes-of-stimulus-powered-rebound-boeing-boost-idUSKBN2401B5
We hope everybody has a fun and safe 4th of July holiday this coming weekend!
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