Skip to main content

Wells nonsense, Covid variants, hurt stocks Thursday. But Friday does a 180

Written By | Jul 9, 2021
Wells nonsense, Covid variants

“Charging Bull” by Arturo Di Modica. Photo: Andrew Henkelman via Wikipedia,

WASHINGTON – For reasons known only to G_d, stocks decided to rally hard Friday. All three major averages continue trending upward as of 1:45 p.m. ET today. Surprisingly (or not) this bullish move followed a day of serious damage to stocks pretty much across the board Thursday. Main reasons for Thursday’s debacle? Terrifying Covid variants were back in the news (of course). Meanwhile, predatory big bank stupidity, characterized by the latest anti-consumer Wells nonsense made traders even more nervous about the financial sector. And nervous about Wells Fargo bank in general.

That unpleasant news surrounding the latest Wells nonsense, along with a continuing plunge in interest rates – which hurts the profitability of banks and other financials – created general unhappiness on Wall Street yesterday. Hence, Thursday’s decline, which proved quite sharp according to the day’s closing McClellan Oscillator chart.

Wells nonsense, Covid variants

McClellan Oscillator sinks like a rock Thursday. Did that drop create a bottom that caused a snapback rally Friday? Chart courtesy, a service to which we subscribe.

CNBC listed additional, non-technical reasons for Thursday’s market cratering.

“Thursday’s losses came as the proliferation of the highly infectious delta Covid variant also fueled worries about the global economic comeback. The Olympics announced a ban of spectators at Tokyo’s summer games as Japan declared a state of emergency to curb the spread of coronavirus. Plus, the latest jobless claims report released Thursday also indicated a potential slowdown in the labor sector.”

Thursday afternoon’s VIX volatility index chart supported the McClellan reading by blipping sharply up, reflecting an increase in fear and loathing on the part of traders and investors.

Wells nonsense, Covid variants

VIX volatility index, chart as of 1:30 p.m. ET Friday. Thursday’s volatility jump settled down a bit on Friday, relieving some investor nervousness. Chart courtesy

As for that ongoing Wells nonsense…

Wells Fargo Bank announced Thursday that it’s shutting down all of its existing personal lines of credit – a popular product offered by the retail-focused Wall Street giant – a move that will likely infuriate legions of customers.

The revolving credit lines, which will be shut down in the coming weeks, typically allow users borrow $3K to $100K, were pitched as a way to consolidate higher-interest credit-card debt, pay for home renovations or avoid overdraft fees on checking accounts attached to the loan.

Customers have been given a 60-day notice that their accounts will be shuttered, and remaining balances will require regular minimum payments, according to the statement.

According to CNBC, it’s the latest “difficult decision” facing Wells CEO Charlie Scharf. The Feds continue to force him to make cutbacks to the banks’ business thanks to restrictions imposed by the Federal Reserve years ago. But hey, how about the “difficult decisions” that now face untold thousands of consumers holding those canceled loans and accounts who get to watch their credit ratings tank due to no fault of their own? Which will make it tough to find another lender due to that credit rating drop. Oh sorry, too bad, saps. We’ll have more on this latest act of financial justice in a follow-up article.

Wells stock (NYSE:WFC) is up on Friday, having got its clock cleaned a bit on Thursday. What’s good for the “stakeholders,” obviously, is not what’s good for those “valued clients” big banks love to talk about. But the apparently never-ending Wells nonsense has to cause long-term Wells Fargo investors to wonder why they’re holding this blundering idiot of a stock.

Alpha, Beta, Delta, Epsilon… How many Covid variants are we supposed to fear?

Is there anything worse than Wells nonsense and Wells Fargo bank’s ongoing Keystone Kop approach to banking? Of course there is. It’s the latest flapdoodle involving Covid variants.

Media idiots, the Notorious Dr Fauci, the CDC and “the WHO” continue to terrorize Americans over the “deadly” Delta variant of the Wuhan Flu. (Can we write that, now that our long-held suspicions are obviously valid?) If you look at the stats, in the main, the terrifying Delta variant is no worse than any other variant of this virus in terms of deaths per affected individuals. The latest “Fear Factor” announcements from the so-called Biden Administration over the past few days are just another attempt to sell vaccinations so Biden can reach his fabled (and arbitrary 70% US vaccination goal. This is what it’s all about, plus, perhaps, offering the administration and the Horrible Dr Fauci to issue a new round of triple mask mandates.

But all this media-government Covid terrorism is wearing thin on the average American, who’s not inclined to suffer another yearlong regime of job and lifestyle restrictions. It’s also wearing thin for investors whose portfolios get whacked every time Mr Market thinks the Feds might get a notion to impose more rounds of stupid, job-destroying lockdowns. We’ve all had enough, and all these latest government warnings are doing is hardening the populace against Washington. As if the public hasn’t already soured on The Swamp they know they no longer control. Stock suffered damage from this renewed nonsense Thursday. But they appear to have shaken it off today if Friday’s trading trajectory offers any indication. Endless freaking out over the latest Covid variants gets more tiresome by the day. For everyone.

In other news, an interesting note on the supposedly DOA coal sector…

Julius de Kempenaer, writing in the publicly available section of, notes that he’s seeing some surprising improvements in his coal sector charts. Interestingly, his observations were echoed in a Wall Street Journal article that remains behind WSJ’s paywall.

Obama warned us years ago that we could still invest in coal stocks, but it wouldn’t be a very smart idea. And indeed it wasn’t, as Obama’s anti-fossil fuel policies gradually destroyed much of that once profitable and highly useful business, just as the policies of Obama’s stooge, aka “President Biden,” have kneecapped oil and gas production in this country, resulting in Obama Era price increases at the pump.

de Kempenaer’s charts seem to predict at least some ongoing, near-term improvement in those coal shares that remain solvent and continue to trade on US exchanges. Most notably, they include a one-time major corporation in the US, now known as Peabody Energy, whose symbol (NYSE:BTU) remains delightful to me, even though most people probably don’t even know what a British Thermal Unit is.

Why is coal doing reasonably well, at least for now?

This is due to a substantial increase in demand for metallurgical coal, aka, met coal, as opposed to thermal coal, which used to fire most of America’s power plants. Until Obama decided to terminate that business.

But, since the steel biz has started to pick up this year after the severe WuFlu lockdown nonsense started to ebb, the need for met coal, also known as “coking coal” – an essential part of steelmaking (if you’re using blast furnaces) – has steadily risen this year. Hence, sales of metcoal have increased substantially, and will continue to do so for at least another 6 months to a year.

Coal, as a long-term energy situation, probably remains doomed, at least for now, due to the frantic efforts of green freaks to impose costly “green” solutions on all of us, whether we can afford them or not. But for the next 6 months to a year, a great many steelmakers, particularly in China, will need a lot more metcoal to fire up steel production. That could make for a good trade for awhile, although not, perhaps, a good long term investment.

After drilling down on this story, we picked up a speculative position in BTU. And we’re already up on this position as of Friday afternoon. Hell, it seems like a better bet than Wells Fargo at this point. Or the latest obsession over the very latest Covid variants. But we’ll need to see where this coal patch revival goes next. Which is why we didn’t buy a lot. The enviro-freaks are in full control of Washington again. Heaven only knows how they’ll increase our heating bills and cost of living index next.

Friday market action

As we near the final hour of trading today, the Dow is up a whopping 448+ points. That marks a hearty 1.31% gain on the day thus far. The broader-based S&P 500 is up 47.90 points for a 1.11% gain today. And even the recently wobbly, tech-heavy NASDAQ has scored a nearly 1% gain thus far. It added 137+ points to its still shaky total today. Fingers crossed.

A wave of selling at the bell today could cancel the party. But we’d expect most of today’s gains to remain. At least until Monday. (UPDATE: Most of the gains held at the closing bell.)

Even today’s afternoon VIX chart (above) indicates Thursday’s upward spike may have been an anomaly. At the right of the chart, we can see this indicator head down once again. Toward

With charts remaining inconsistent, however, most of our indicators continue to show puzzlement rather than real conviction. Don’t miss the next thrilling episode.

Have a great weekend.


Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17