Sell-the-News Action Puts a Dent in Bank Earnings

 | Jul 14, 2017 | 4:28 PM EDT
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Given the recent run in financials and the comments this week from Fed Chair Janet Yellen, whose more dovish outlook was reinforced again today by weak retail sales and nonexistent inflation readings, it wasn't too surprising to see some sell-the-news action in the financials. Citigroup (C) , Wells Fargo (WFM) and JPMorgan (JPM) each delivered solid numbers ahead of estimates, but both gapped lower at the open and put pressure on the rest of the sector. (Citigroup and Wells Fargo are part of TheStreet's Action Alerts PLUS portfolio.) 

Unfortunately for the bears, that early pressure didn't spill over into the rest of the market. Instead, it seems the money that poured into banks a couple of weeks ago rotated back into other areas, particularly tech, which was the leading sector on the day. To add insult to injury, financials all put in pretty good hammers, finishing well off opening lows, and both major indices ended the day at fresh record highs. The Nasdaq wasn't too far behind, finishing less than four points off all-time highs. 

Things were looking a little shaky for the bulls a few weeks back, as the bearish case was starting to take shape, but it never resulted in any real damage to the indices. We again see the power of an uptrend, as well as the difficulty trying to predict how and when those trends will end. 

Earnings news starts to hit fast and furious next week, and I'll be looking for a new crop of earnings winners. In the meantime, enjoy some tea and scones Sunday morning during the Wimbledon final and maybe some Dothraki blood pie later that night for the Game of Thrones premiere. 

-- Written by Jim Koford 

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