wallstreetexaminer.com / by Shah Gilani via Money Morning /
Financials pulled a world-class fakeout last week, and that’s important for what’s coming next.
You see, on Thursday, markets looked like they were giving up; the major indexes broke through near-term support, and some important psychological support levels were pierced.
The breaking news was that China’s exports had fallen 10%. So industrials, materials, and commodities took the brunt of the selling. China is always a barometer of global growth, because it does lots of the globe’s growing. And so with news of China’s export fall-off, financials were set to release their earnings amid an “atmosphere of reduced expectations,” to put it mildly.
Of course, those expectations have been carefully stage-managed and downplayed all along – there’s that psychology again.
Then on Friday, starting with JPMorgan Chase & Co. (NYSE: JPM) before the open, the banks let fly with their earnings, and things got “interesting”…
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Banks are under stress worldwide, of course, but especially in Europe. Here in the United States, earnings are weak, and so banks have taken it on the chin. Thursday was no exception.