Daily Market Color September 29, 2016U.S. Markets Slide Despite Strong Economic Data, Weighed Down by Financials Markets were presented with a plethora of data throughout the day, beginning with a better-than-expected gross domestic product figure. GDP for the second quarter grew at a 1.4% annualized rate compared to a forecasted 1.3% move, and a 1.1% Q1 level. The rise was mainly attributed to robust household consumption, which posted a +4.3% mark for Q2. In addition to GDP, the nation’s goods trade balance trimmed its deficit more than anticipated, falling to $58.4 billion where a $62.2 billion imbalance was projected. Coupled with the reported solid 254,000 initial jobless claims weekly figure, the indicators are pointing up for strong third quarter economic growth. Dennis Lockhart, Fed Bank President of Atlanta, recognized the progression towards maximum employment and sustained 2% growth in a speech to an Orlando Forum today, and in doing so, reminded the public that interest rates are due for an increase in the short term. While the economic data was a positive indication for markets, major indexes ultimately fell on the day amid concerns over a financial contagion stemming from the negative news surrounding Deutsche Bank and Wells Fargo. Deutsche Bank’s capital concerns came under further pressure today after it reported that hedge funds were withdrawing capital related to cleared derivatives transactions, while Wells Fargo’s reputational damage continues to increase as negative publicity piles up for the company, this time related to repossessions of military members’ cars. Shares of DB touched a record low today while Wells Fargo’s stock hit its lowest mark in over a year. Abroad, European and Asian markets finished up on the day, mainly boosted by a rise in energy prices following the reported OPEC agreement yesterday. However, another large German bank found itself in the spotlight as Commerzbank AG grabbed headlines after announcing its upcoming cost-cutting initiatives. CEO Martin Zielke presented the supervisory board with a plan to slash nearly 9,600 jobs and suspend dividends in an effort to increase profitability for the bank. Commerzbank’s share price fell nearly 6% on the day after investors did not respond favorably to the proposal. In India, investors also turned bearish after the country’s military attacked terrorist camps located in Pakistan as revenge for a strike on Indian soldiers earlier in the month. Concerns over relations between the two countries prompted a selloff in India’s currency and equities alike, while yields on sovereign notes jumped 8 bps. All three major U.S. indexes are currently trading down roughly 1%, while Treasury yields/swap rates are down 1-2 bps across the curve. Building off yesterday’s surge, oil prices continued to rise today with Brent crude up 0.70% to $49/barrel and WTI crude up 1.30% to $47.65/barrel.