News Flash 8/31/17: Wells you’ve done it again

Market Headlines:

  • Stock indexes perform well after strong GDP report
  • Chipmakers push NASDAQ to third straight up day
  • Gas prices hit 2 year highs

Dow: Up .25%

NASDAQ: Up .95&

S&P 500: Up .57%

 

Jobs: 

Economists are expecting new hirings to slow down this month after an upside surprise in July.  However, if the US posts a third month in a row of 200k+ jobs created, this could indicate that their is a boom period on the horizon for our economy.   This would keep our unemployment level at extremely low historic levels (lowest in 16 years).  We have not seen sub 4% unemployment this millennia.   The problem is that while unemployment is low, wages are stagnant.  There are very many factors at play, but the lagging wage growth could show signs of weakness in contrast to the other labor market indicators.

 

Scandal:

Wells Fargo has been dealing with law suits and angry customers for the likes of a year now.   This was for good reason, because the banking giant basically forced employees to create millions of fake credit card accounts to boost numbers, and fired anyone that stood out against it.  What choice did these workers have?  You probably know this.  However, new information came out today saying that Wells underestimated the amount of fake accounts by almost 70% (2.1 million previously estimated)!  This is going to cost the bank an extra 3.7 million dollars in customer refunds based on the analysis of 3.5 million “potentially unauthorized” accounts.  Yeah, O.K. Wells Fargo we all know they were unauthorized.  There isn’t much they can say at this point to invoke much consumer trust in the bank, after being in the news a second time.

 

Harvey:

Houston is underwater after a devastating hurricane provided over 50 inches of rain in a short period of time, putting over 100k houses underwater.  This has increased gas prices to a 2 year high after the owner of the largest U.S. pipeline publicly stated there were major backups coming out of Houston.  Makes sense that when the energy capital of the U.S. goes underwater, prices go up.  Hopefully this isn’t a long term issue for the lone star state, as the death toll has already climbed to 39 before extensive search and rescue has been executed. #PrayforHouston

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