I came into Wednesday's session looking for action from transportation, and got it when CSX Corporation (CSX) inadvertently released results before the closing bell. Earnings came in at $0.47, down year-over- year; beating Wall Street consensus by $0.03.
The Dow was already climbing off the canvas when that news broke, giving it bounce and enough oomph for the blue-chip index to reach another record high. The S&P 500 also finished at an all-time high, too, by the tiniest fraction possible.
Hey, a win is a win, right?
Oil was the big loser after the U.S. Energy Information Administration (EIA) reported a crude drawdown that was less than expected. On the other hand, gold soared above treasury yields that had plunged, reflecting a persistent anxiety that record equity highs cannot dissuade.
That angst continues to set the tone for stocks.
Breadth for the NYS:
- New highs 304
- New Lows 2
Breadth NASDAQ:
- New Highs 219
- New Lows 14
The biggest name to report after the close, Yum! Brands (YUM) posted earnings of $0.75, beating the Street by a penny. The shares were up nicely in aftermarket trading as management guided the year-round core operating profits to be at least 14% in the second quarter, and core operating profits came in at 7%.
Thursday, JP Morgan (JPM) reported earnings and the Street was looking for $1.49, but they were also looking for signs of engagement between banks and Main Street.
After peaking in 2012, year-over-year, demand for all types of consumer loans tumbled year after year until hitting rock bottom last year.
Second Quarter:
- Auto loan demand +18% almost 100% improvements
- Credit Card demand +12.5% up 39% from last year
- Other consumer loans +5.9% from a decline of 1.4% last year
Recommended
So far, this year has seen an impressive inflection in loan demand; although I continue to hear horror stories on the approval process as it’s very encouraging. Low yields should drive demand for business loans and refinance loans, but this hasn’t been the case with historic rates thus far.
|
2Q Loan Demand |
2012 |
2013 |
2014 |
2015 |
2016 |
|
Auto |
+35.3% |
18.3% |
10.9% |
9.6% |
18.0% |
|
Credit Card |
+17.5% |
+12.0% |
+9.8% |
+9.0% |
+12.5% |
|
Consumer (not auto or credit card) |
+16.4% |
+3.1% |
+0.0% |
-1.4% |
+5.9% |
The only S&P 500 sector in the red this year is financials -2.1% overall, weighed down by the heavyweight megabanks; including JP Morgan, which is down 4.3%. If financials can find a way to rally before interest rates increase, then this rally will be cooking with gas (or without it, with respect to mitigating the Fed factor).
JP Morgan sees resistance at $64.00, but it needs to close above $66.00 to signal a real turnaround.
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