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Futures have been rallying off their overnight lows and are now indicated 0.30% higher. CPI for April was just released and came inline with expectations (-0.8%) at the headline level and weaker than expected on a core basis (-0.4 vs -0.2%). Inflation data will certainly be interesting to watch over the coming months, but for now, the impact of the pandemic on consumer prices (besides groceries which is the only place consumers are really spending these days) is definitely lower.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, the Fed’s plans for buying ETFs, the NFIB Small Business Sentiment Survey, the latest global and national trends related to the COVID-19 outbreak and much more.
It’s been a rough year for the banks. Despite coming into this crisis much better capitalized than they were during the last, the sector still hasn’t been able to avoid the pain. Year to date, the group is down about 40% which is worse than any other industry group in the S&P 500.
The Bank group had been trending nicely off ifs March lows and even closed above its 50-DMA for a day on 4/29. That didn’t last long, though. In recent days, the KBW Bank Index has not only given up its 50-DMA, but it has also broken below its uptrend line from the lows. Just yesterday, while the S&P 500 was up fractionally, the KBW Bank Index was down over 3%. While the major banks increased their loan loss provisions in their most recent earnings reports, just like a gallon of milk, the longer the economy stays ‘on the shelf’ the more likely it is that loans on their books will start to spoil.