Yahoo Finance Yellen bashes banks, Uber's big purchase and hospital stocks soar
All three major indices are spending the second straight day in the red through the first half of the session due to, as New York Stock Exchange floor trader, Keith Bliss of Cuttone and Company says, “we’ve started to see some of the sort of roll over even though the medium and long term trends are very much in tact.”
He notes that weaker economic reports such as today’s ADP jobs number coming in lower than expected could also be a sign that traders are pricing this into the market, perhaps ahead of Friday’s monhtly jobs report.
Crude also having a rough go of it after the weekly inventory report showed a gain of 10.3 million barrels. Bliss weighed in on the longer term crude trends warning, “be prepared for more volatility.”
At the start of the day, prices were up on news that ISIS had attacked an Iraqi pipeline. Those exogenous factors, combined with reports like today's on inventories could keep crude on a bit of a roller coaster.
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One sector trying to get the market out of the doldrums is hospital stocks, spiking today as the Supreme Court hears the latest arguments against the Affordable Care Act.
“You may have trading algorithms reading headlines,” says Yahoo Finance Senior Columnist Michael Santoli. “If Obamacare in its current form more or less remains, it remains very good for the hospital stocks.”
Today’s move came after headlines about Justice Kennedy’s line of questioning in the oral arguments. Yahoo Finance’s Aaron Task cautions, “The tone of the questions doesn’t always tell you how a justice is going to vote one way or the other.”
Bank bashing
Fed Chair Janet Yellen has added her voice to the growing chorus of disapproval with respect to the big banks. During a speech last night in New York Yellen said, "There may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness."
This comes just days after Warren Buffett, in his annual letter to shareholders called bankers “Wall Street denizens” who “are always ready to suspend disbelief when dubious maneuvers are used to manufacture rising per-share earnings, particularly if these acrobatics produce mergers that generate huge fees for investment bankers.”
Uber acquisition
Uber is taking steps to break free from its reliance on Google (GOOGL) and Apple (AAPL) maps. The smartphone-driven car service is buying startup mapping software maker De-Carta which has had a hand in GM's (GM) OnStar system.
Santoli notes it is “a rare acquisition for a company that hasn’t been around all that long.” He says he sees the logic in the move assuming Uber “want[s] to have some independence, why not have it in house? Mapping obviously [is] as crucial to Uber as any other piece of IP. To me it makes sense.”
Task points out that the Google and Apples of the world are competing in many of the same spaces as Uber, noting that self driving cars and the technology therein would be enough for Uber to take notice.
