JPMorgan’s (JPM) earnings were strong, as I suggested yesterday they probably would be (the stock fell, though, on news that they - and BofA (BAC), and a number of other firms - will be forced to pay foreclosure “victims”). Retail sales were good-to-strong as well, at 0.8% ex-autos and an upward revision to last month. The Beige Book was upbeat as well.
So, for a day, stocks managed to skitter to unchanged. The fact that they were only unchanged speaks to valuation levels. Bonds rallied a smidge to 3.47%, and TIPS rallied further as well. Breakevens declined slightly.
Oil recovered above $107, somewhat weakly. But gasoline jumped 2.3%. Over the last month, crude is up 5.7% while gasoline is up 9.4% (17.0% and 32.4% over the last 90 days). There was no big mystery about gasoline’s outperformance yesterday. The weekly DOE inventory numbers showed the largest weekly gasoline draw since 1998, at 7 million barrels (see the chart below, click to enlarge images). Analysts were expecting a 1mm barrel draw. There are occasionally surprises at this time of year associated with the shifting of production from winter gasoline to summer gasoline, but the main draws usually occur near the end of the summer driving season in August.
Biggest weekly gasoline draw in more than a decade.
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