US stocks: Goldman Sachs and Citigroup disappointed investors

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American assets was a little sad on the background of intensifying period of publication of the quarterly reports – perhaps emotions for American traders surged after dismal reports from Paris. Hardly now it is possible to assert with confidence whether this is so must wait till the opening of today’s overseas trading. However, at least in part to the fact there are internal reasons: Bank papers this quarter, excluding shares of JP Morgan Chase, seem inappropriately weak.
So, having frustrated the publication of Goldman Sachs and Citigroup, probably for the first time since the financial crisis of 2008, has forced to think seriously about whether there were for them to reserve a niche for further development. This fear became especially pronounced after the General disappointment with the cryptocurrency markets.
Exploring the emerging picture in the context of the proverbial recessionary expectations, it should be noted that defensive sectors on the US stock market – such as electricity (+12%) and health (+10%) in the fourth quarter was worse than the S&P 500 index, which since the beginning of the year increased by 17%. But the telecoms sector (+20%), which, however, had all sorts of politicized history like Huawei, championship presentation 5G and never ending absorption of the Telecom Sprint Corporation T-Mobile US – showed a very cheerful dynamics. As mathematicians say, “as an example it is impossible to prove, but an example can be disproved”.
That is, after all, fears of a recession in the markets are not as strong to actually believe. Over the last three years the maximum average yield showed heavy industry (industrials), consumption goods (consumer staples) (+36%), information technology (IT) (+25%) and the consumption of household goods (consumer discretionary) (+23,5%). The worst performers were the oil and gas industry (+4%) due to volatility in the oil market. The average yield defensive sectors over the three years was 12% versus 19% in the whole S&P 500. But now, after a rise of oil above $70 per barrel Brent crude is ripe preconditions for change of current clichés and stereotypes.
That Charles Evans, President of the Chicago fed, said yesterday in an interview with CNBC that he would be “comfortable,” if interest rates remain unchanged at least until the fall of 2020, putting special emphasis on the fact that the inflation target of 2% for a long period of time remains elusive after surprise to American economists, the fall in inflation in recent months. The change in rhetoric by the fed has not yet led to any significant weakening of the dollar, not least because most of the major Central banks of the world have eagerly followed suit, abandoning any plans of raising interest rates.
So, the Reserve Bank of Australia suddenly became another major financial regulator, which has moved to a more accommodative monetary policy. The minutes of the last RBA meeting the definition of monetary policy indicates that if inflation does not rise from its current miserable levels and/or if the unemployment rate starts to rise, the “interest rate reduction is likely to be appropriate”.
Meanwhile, the ruble today with the opening remains in a state of contemplation, being not able to understand whether yesterday’s events in Paris the day it positive or negative. Trade occurs in a very narrow range 64,20–of 64.30, compared to yesterday’s value at the same time at the level 64,19 rubles per dollar. In tandem with the Euro strong motion is not detected also in this case the oscillations are in the range space of 72.52-72,57.
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Vladimir Rojankovski,
LIFA,
The expert “International financial centre”