Stocks have improved after starting the day off in a lackadaisical mood given tepid data on the economy and squishy earnings news. Gold, silver, and crude oil are higher along with Treasuries, while the dollar is trading around the unchanged line.
On the news front…
Retail sales missed the mark in June, rising just 0.2% compared with expectations for a 0.5% gain. The ex-autos sales figure was also a tad weaker at +0.2% (economists were looking for a +0.3% reading). That said, many market players are actually hoping for somewhat softer data to keep the Federal Reserve off their backs. So, we are in somewhat of a “bad news is good news” environment.
Speaking of the economy, Treasury Secretary Janet Yellen noted that inflation pressures are easing with the labor market coming off the boil and housing and rent costs cooling. She also told Bloomberg News that supply chain normalization in autos and still-solid underlying job market conditions should help the US economy.
Second-quarter earnings season is in full swing, with Bank of America (BAC) the biggest name on today’s docket. Q2 profit jumped 19% to $7.41 billion, or 88 cents per share, slightly ahead of the 84-cent average estimate.
CEO Brian Moynihan characterized the economy as “healthy” but “growing at a slower pace,” and the bank reported solid increases in both net interest income and noninterest income. But weaker numbers from Morgan Stanley (MS) and super-regional bank PNC Financial Services (PNC) tempered the market’s response.
Finally, now might be a good time to ask if you have your Powerball tickets yet! The jackpot for the multistate lottery game just topped $1 billion because no one has correctly picked numbers since April 19. If someone is lucky enough to do so Wednesday night, they’ll likely win the third-largest Powerball jackpot ever.