It’s all about banks today
Banks led the S&P up, then back down again
Gossip about higher earnings for US banks led the opening, but concerns about core profitability dampened enthusiasm late in the morning.
The flattening yield curve isn’t good for banks (who borrow short and lend long). Neither is fading loan growth. Neither is Glass-Steagal, which Gary Cohn wants to revive.
Glass-Steagal would be bad for JP Morgan in particular. If the commercial banks had to exit the investment banking business, US investment banking would become a duopoly with only two players–Morgan Stanley and Goldman Sachs.