France Downgraded, U.S. Banks Post Lackluster Earnings

You need Flash Player <a href=""></a> to see this video! Get Adobe Flash Player
Points Earned
0 of 203051



steve last week uh we saw some European downgrades uh what’s that gonna mean for the market and what’s it gonna mean for some of these countries Well matt S&P took down their ratings on France most notably from triple A to double A plus they also lowered their ratings on Austria which was also triple A italy Spain and a few others What that means is that those countries are less credit worthy then they were a week ago the important thing to remember is that the marker knew they were less credit worthy then they were they’ve been less credit worth for months The question now is does germany have more influence as one of the few remaining triple A’s in the euro Zone The real issue here is what’s still going on in greece which owes more than fourteen billion euros come March 20th and will their bond holders agree to take a haircut on their bonds that remains to be seen that’s a more important issue right now then the fact the france is no longer a triple A Is austerity in the cards for some of these countries That’s the real issue here is that can Germany now force even stronger austerity measures The problem there is that you can’t grow by cutting and if these countries just keep cutting and cutting their not going to grow fast enough to be able to pay for the money that they’ve already borrowed So remains to be seen still attached to the market the stock market seems to be brushing this off and doesn’t really seem bothered by it yet but that can change in a hurry though as we have learned over the past few months What about uh some of our own banks this week we’ve got some banks uh coming out with their earnings uh what do you see going on there Well the bank earnings so far we’ve had JP Morgan Citigroup and Wells Fargo report at this point None of them have been particularly great Wells Fargo the best of a of a pretty lackluster bunch of bank earnings with their earnings actually growing from a year ago The problem is growth in the US is very slow it’s hard to grow so that means loan growth is not picking up the way these banks need it to they’re making less money in the markets because of what’s gone and the choppiness in the market and the difficulties in making money on that side of the business bank of America still to come this week on thursday we’ll see what they report but the street isn’t expecting a whole lot