September 29, 2016

Thursday’s markets saw the S&P 500 fall 0.9% while Toronto was up 0.2%.

U.S. financials stocks fell due to fears of that Deutsche Bank was facing something of a run on certain of its deposits. Banks are always highly leveraged and fears about their financial strength can become self fulfilling.

Wells Fargo was down another 2.1% in part due to the general weak day for financials but in part due to its own problems. The CEO had another weak performance today in testifying to congress. He did not seem on top of his game in that he seemed to lack detailed knowledge about the account opening scandal. It’s also true that the congress members mostly used the session as a chance to make speeches rather than to actually ask any questions and give John Stumpf a chance to reply. At one point he claimed to have no knowledge of whether other banks use cross selling. I suspect Stumpf will be forced out over this scandal.

Costco’s earnings came out after the close of regular trading and were relatively weak but still better than expected and the stock rose in after-hours trading.