YET UNCERTAINTY CONTINUES AND NEAR-TERM MARKET VOLATILITY IS STILL LIKELY
The conditions in our capital markets have improved during the past month despite continued uncertainty in the financial sector.
Many banks and finance companies have begun to announce first quarter earnings and those results indicate that core lending trading profitability has been strong but that transaction-related activities remain weak and loan losses from prior-period lending continue to mount.
The strength of the banks’ core operations are giving investors optimism that they will earn their way out of the bad loan mess over time. However, that optimism is skin deep and market fluctuation suggests that there remains much skepticism about the banking sectors. Expect loads of near-term volatility.
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