Quiet trading day ahead of the French elections. We had a minor pullback today after a pop yesterday on decent earnings and recovery from an oversold condition.
Late in the day President Trump and Treasury Secretary Mnuchin presented an executive order to look at TLAC and SIFI status and rollback unneeded regulations on financial companies, but the XLF didn't respond positively, and even sold off a little into the close.
WAL reported decent earnings, with continued strong loan growth and returns. On a pullback we'd recommend adding to your positions.
Tuesday, September 6th:
Banks and interest rate sensitive stocks were hit today on a weak ISM report reducing the likelihood of a rate hike in the minds of market observers. Bottom line: the Fed is afraid of its own shadow. More than 1 hike this year is unlikely despite what Fischer said. Take profits in the regional banks that have ripped in the past few weeks and wait for a better entry point.
Jeffrey Miller. Former KBW #1 II analyst, bank hedge fund manager, and top-performing mutual fund manager.