Today was the day of the MOAB (“Mother of All Bombs”) heard ’round the world. A brief recap…
$1 We started today with the first of the major banks releasing earnings. Wells Fargo showed flat earnings as the bank continues to reel from the fake accounts scandal. JP Morgan, the largest of the domestic banks, beat estimates on the top and bottom lines thanks to strong bond trading. Citi also produced strong reports. Rate hikes helped the banks tremendously. However, the banks warned that the lending is growing slower than shareholders have anticipated since the election.
$2 Wall Street’s fear gauge, the CBOE Volatility Index ($VIX), closed above its 200-day moving average. We are seeing a mix of political risks baked in, along with geopolitical issues that we’ll touch on next.
$3 The U.S. dropped the largest non-nuclear bomb in the world on a network of tunnels in Afghanistan. On the same day, North Korea warned of a ‘significant event’ to occur this weekend. The Pentagon has said the U.S. will preemptively strike N.Korea if necessary. All of this dampened the markets, reversing all the morning gains. Markets around the world will react to rumblings of war; continue being vigilant.