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Bernanke Testimony Fails to Sway Investors


Today's financial recap and tomorrow's financial outlook.

The S&P 500 (INDEXSP:.INX) finished the day up 0.2%. Ben Bernanke testified in front of the House Financial Services Committee and stated that the Federal Reserve's asset purchases are "by no means on a present course." The Fed may therefore reduce or increase the pace of bond purchases depending on economic conditions.

Gold and silver briefly spiked after Ben Bernanke began to testify this morning, but lost all of their gains and more throughout the day. Gold closed down 1.3% and silver closed down 3.5%. The 10-year Treasury yield dropped 4 bps to 2.48%, the first time that the yield had been below 2.5% in over two weeks.

Housing starts for June came in much worse than expected at a 836K annualized rate versus the 951K consensus, declining 9.9% month over month, due to a very sharp decline in multi-family homes. This was the largest miss versus the consensus in history. Permits for June were 911K, also falling short of the 990K expected. The Beige Book was released this afternoon in which 11 of the 12 Fed banking districts reported "modest to moderate growth."

Bank of America (NYSE:BAC) and The Bank of New York Mellon Corporation (NYSE:BK) both reported a surge in profits this morning before the market opened. Shares of Bank of America rose 3% on the day.

American Express (NYSE:AXP) shares fell today after the European Commission announced that a limit may be placed on the fees that banks can charge to process credit card payments. American Express is notorious for charging very high fees. The company is due to release earnings after the close today.

Tesla Motors (NASDAQ:TSLA) rallied 10% on the day after Dougherty raised its price target on the stock to $200. This rise comes a day after shares plunged 16% following a Goldman Sachs downgrade.

Tomorrow's Financial Outlook

Jobless claims will be released at 8:30 a.m. EDT. Initial claims are expected to come in at 344K after seeing 360K last week. The 4-week moving average of claims currently stands at 351.8K. The Philadelphia regional manufacturing survey will be released at 10:00 a.m. EDT with an expected reading of 9.0. Leading economic indicators from June will also be released at 10:00 a.m and are expected to rise 0.3% from the month prior.

Ben Bernanke will deliver his semi-annual report to the Senate Banking Committee at 10:30 a.m. EDT. His notes will be released an hour and a half prior to the testimony.

BlackRock (NYSE:BLK), Capital One Financial (NYSE:COF), Chipotle Mexican Grill (NYSE:CMG), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Morgan Stanley (NYSE:MS) and Verizon (NYSE:VZ) will be releasing earnings tomorrow.

Twitter: @Minyanville

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No positions in stocks mentioned.

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