Good afternoon, Welcome to the second hour of Turner's
closing bill. I'm ken, buffa and thank goodness
it is friday T G I F ken, that
is right. A very happy friday to you.
A very happy friday to our viewers as well.
And hi everyone, I'm christian Schoeller, Thank you
for joining us. So again, we've got an
action packed next to ours. Yes, I brought
the green with me. Why don't you show them
? Oh yeah, you did, you did.
I was thinking you were gonna like whip something out
. I don't know, I don't know, maybe
an amazon prime or something. It is. No
, we got green on the board. Finally you
have green on the screen. So lo and behold
the candy buffet factor is real ken, I swear
something has been up at three p.m. Eastern time pretty
well, at least for the past three days.
Right? The stock market has been definitely in rally
mode. We haven't been in the green every single
day, but we've been pretty much near session highs
and that's the case today as well. So this
is a live look at the major indexes, the
dow up 1.9% the S and P. F.
1.7% the NASDAQ up 1.5% and certainly Wall Street looking
at two and the week on a positive note after
what's been a bit of a choppy week for stocks
, that's for sure. But we have risen into
the close and that has definitely been a positive,
so variety of factors moving the stock market this week
. Data earnings and that's the case today as well
. So this morning we had stronger than expected,
retail sales data for june easing fears that the Fed
will raise rates more aggressively in its next meeting in
a few weeks. So that's some good news.
Atlanta Fed president Raphael Bostic telling the Tampa Bay Business
Journal that moving on interest rates to dramatically I.
E. A full percentage point could add to the
uncertainty that we're seeing in the economy and undermine some
of the more positive trends. Um, so I
don't know will we get a full percentage rate rise
when we not, I don't know, it's gonna
be a big rate rise. That's for sure.
But certainly some of the data this morning, ken
is a positive. Yeah, absolutely. And it's
interesting because it always feels like before the rate hikes
come were very indecisive whether or not what it's either
0.5% or 75 basis points where we saw last time
, but now we're teetering between 75 and a full
percentage and we still don't know quite yet because these
numbers are making such a big impact. So turning
back to the economy, consumers are still shopping despite
red hot inflation. I don't know how you do
it. Retail sales rose by 1% in June from
the previous month. Americans spent more on goods like
furniture, groceries and gas, That's exciting restaurants also
, so more revenue even though dining out has also
become more expensive. So speaking of spending, ken
, we do know that the consumer feeling a little
bit more optimistic of late. So every month the
University of michigan puts out its consumer sentiment survey That
does measure how the average American feels about the state
of the economy and the score for the index for
July coming in at 51.1. That's a little bit
of an improvement from June which saw reading of 50
. So that's basically break even 50 is the demarcation
line between positive and negative, negative sentiment about the
economy Is on a scale of 100. But this
reading is still historically low, it's actually down 37%
from a year ago. Goes to show you most
times or good times. It's just that now due
to a very strange pandemic, we're still having a
hard time working our way through this recovery. So
that's because concerns about inflation still top of mind for
many Americans. But this improvement does show a slight
easing of this concern, possibly triggered by falling gas
prices. Can we've seen gas prices fall every single
day for 30 days. That feels really good on
consumer's wallet. It does, and I'm checking the
average gas price right now because I believe last time
we were in the 60s, but I just want
to make sure and triple a says the average gas
price$4.57. That's pretty good, right. It's
come down almost 50 it's not under four yet.
But we're getting there, we're getting there, we're
getting there. Okay, ken, well, we
also got some mixed bank earnings that's boosting markets,
investors. Growing concerned when we saw dismal reports from
Jpmorgan Chase and morgan Stanley yesterday, Jpmorgan Chase Ceo
Jamie Diamond saying that his company was stashing away money
to prepare for an economic downturn, expecting americans to
start defaulting on loans might sound like deja vu.
That's because it kind of is the last time you
said this was at the start of the pandemic when
a lot of things were uncertain. Well, Diamond
didn't provide a timetable for when he thinks that this
might happen. But quarterly results from Citigroup and Wells
Fargo, actually giving a little bit more of an
optimistic picture this morning, ken. Absolutely. I
know a lot of investors are keeping an eye on
those banks, so we shall see. So let's
dive a little deeper into those quarterly results, shall
we? Taking a look at shares of Citigroup this
afternoon. Now the stock Is popping more than 14%
after beating on both the top and bottom lines.
So here are the results. Citigroup notched sales of
19.6 Bubba billion dollars for the second quarter, which
much higher than$18.2 billion. That Wall Street had
anticipated city also earned 200$2, per share versus
the dollar 68 that was expected. Now, that's
more than a 30% surprise to the upside. So
the company, credit rising interest rates for its surge
in revenue. We've had four major banks report earnings
so far this season. City is the only one
to beat on revenue and understand we have two more
coming on monday as well. Pretty impressive. And
they have a new ceo to write jane fraser on
the first female ceo Of a major bank um able
to get this one done very positive results and it's
not every day certainly in this market that you see
any stock let alone a bank. Stock rights 13%
in a single day. It's impressive. But another
bank can that we heard from this morning, Wells
Fargo posting mixed results and that company did beat on
earnings just a little bit. I would say this
report was a little bit more kind of in line
with expectations, but we'll still chalk it up to
a beat by two cents revenue missed actually. But
Wells Fargo shares are up 6% today. So the
company bringing in$17 billion that was half a billion
shy of expectations Adjusted earnings per share coming in 82
cents versus 80 cents expected. And Wells Fargo,
which has benefited from borrowing borrowers actually repaying their loans
expecting credit losses to increase from their current levels,
which are very low. So the bank is likely
going to be impacted and its mortgage business certainly by
higher rates, less demand for actual mortgages out there
and then interest income, the company those saying should
more than offset those losses. So interest net interest
income is the money that these banks make on loans
. The higher the interest rates, the more lucrative
it is, the higher the net interest income that
they make on the money that they lend out.
But it's a very odd time because in a rising
rate environment, I think many people think banks would
be ripping. But the problem is is that rates
are rising due to inflation and the economy is actually
slowing down. So that's not good for loan growth
. Obviously, as we saw with Wells Fargo and
Jpmorgan yesterday, these banks now starting to prepare if
borrowers aren't able to repay their loans. Exactly.
And also a lot fewer folks are gonna be reaching
for those loans because those interest rates are so high
as well.