Yesterday snapped our small losing streak. Much of Monday's bearish action was driven by guide downs and poor earnings from a number of retailers. Investors often look to retail sales as an indication of the health of the consumer, and Monday's actions did not paint a pretty picture. However, the story brightened yesterday as retail sales data from the commerce department beat expectations.
Also helping the rally yesterday were earnings released by J.P. Morgan and Wells Fargo, both beating expectations. Since lending is at the heart of our economic life blood, heavy attention is paid to these firms as they report. And a lot of insight into the economy can be drawn from analyzing their performance. One item of interest to keep in mind regarding bank earnings is the use of "loan-loss reserves" to boost profits.
During the financial crisis, banks set aside funds to cover future losses in case defaults continued ... Log in or subscribe to continue reading.
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