Daily Market Color

Solid Bank Earnings and Strong US Data Dominate Market Sentiment

US stocks are generally unchanged today while Treasurys are selling off again across the curve, as markets absorb the latest mass attack details coming out of Nice, France, the latest Q2 bank earnings and strong US economic data.  This morning Wells Fargo and Citi were the latest banks to report earnings, and while they did have pressure on loan reserves and NIM, loan and deposit growth were solid and trading revenue showed strength for the quarter as well.
In terms of new US data releases, today we saw a number of important positive readings released.  Retail sales for June surprised to the upside coming out at +0.6% vs. expectations of +0.1%.  Industrial production for June was up 0.6% vs. expectations of +0.3% as well.  And finally CPI was generally in line with expectations at +0.2% for the month and +1.0% year-over-year.
All three major US stock indexes are currently flat to down a fraction, while Treasury yields and swap rates are 4-6 bps higher across the curve.  The 10 year Treasury yield is now back up to 1.60% – a quarter point above the low yield reached post-Brexit  Oil prices are continuing their recent rally, with both WTI and Brent crude currently trading up nearly 0.5% on the day.

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