My inbox is full of talk about the technical damage that has been done to the markets. Less than 30 percent of stocks are above their 200-day moving averages. Only 20 percent are above their 10-day moving averages. It goes on and on.
The problem is this has taken everyone's mind off the fundamentals. True, there are many headwinds: greater risk of a slowdown in Europe and China, the end of quantitative easing, and the difficulty of controlling an Ebola epidemic.
But there are tailwinds as well: lower oil prices, a better U.S. economy and very high cash levels at U.S. corporations.
Given the negative sentiments, it's worthwhile to note that two bank executives highlighted the strengths of the U.S. economy in their earnings report Tuesday morning.
Wells Fargo CEO John Stumpf noted, "We continue to see signs of a steadily improving economy."
And JPMorgan Chase CEO Jamie Dimon said, "While challenges remain in the global economic recovery, the U.S. economy is an exception, showing signs of steady improvement."
Speaking of banks, three big names reported, with Citigroup announcing an earnings and sales beat, JPMorgan missing on earnings, and Wells Fargo roughly in line.
The most important bank to report was Wells Fargo because it's the nation's largest mortgage lender. About 60 percent of its revenues are from community banking, which includes mortgages.
Mortgage banking declined 5 percent, but originations were up 2 percent quarter over quarter.
Net interest margin (the difference between the income generated from loans and the interest paid out to lenders) dropped 9 basis points, to 3.06 percent.
Loan growth was mixed. Commercial loans grew 2.6 percent, while consumer loans were down 1.4 percent. Average it out, and loan growth was up 0.3 percent.
The problem with Wells Fargo is that because it is such a mortgage behemoth it is much more dependent on interest-rate growth than most other banks. And the lack of any rise in rates is a problem for the bank.
Let's call it a good, not great, quarter. It's a bit worrisome that consumer loan demand remains tepid.
Financials have held up much better than the overall market. The is down about 5 percent this month, the S&P Financial Sector is down 3.5 percent.
Elsewhere:
1) The German government cut its growth outlook to 1.2 percent from 1.8 percent for 2014, and to 1.3 percent from 2 percent in 2015. The German economy minister cited "geopolitical crises" and sluggish global growth as the culprit, though he did say domestic demand remains "intact." German investor confidence was weaker than expected.
2) In London, British luxury brand Burberry said that conditions in some markets, particularly China, had worsened. The Ukraine crisis is also affecting demand in Russia, and the demonstrations in Hong Kong are not helping. Concerns about the possibility of slowing travel due to Ebola concerns are also present.
Still, keep it in perspective. Sales in China grew in the high single digits. That isn't the double-digit growth that was previously seen, but it's hardly a collapse.
3) Just where is break-even for shale producers? I've quoted several different estimates in the past two weeks as shale producers have seen their stock prices plunge, with West Texas Intermediate prices going from $105 to $85.
Commerzbank called out the problem in a note: "According to Maria van der Hoeven, director of the International Energy Agency (IEA), 82% of shale oil producers have a break-even price of $60 or lower. By contrast, IEA Chief Economist Birol claimed that US shale oil production needs about $80 in order to be profitable."
In other words, the estimates are all over the place because it depends on what fields you are talking about. Some fields have higher yields, others have more gas than oil, but for sure with oil now in the low $80s, some are marginal.