The government announced the results of its stress test for 19 of the nation’s largest financial institutions yesterday. It found that 10 of the 19 banks needed to add an additional $74 billion more in common equity capital. Many of the banks that were short already made announcements of plans to raise capital. The markets appeared relieved, as futures indicated an open as much as 1.8% higher.
Futures pulled back some after the April employment situations report. The decline in payrolls was 539,000, which was smaller than the expected 600,000 decline. However, the report still indicates weakness in the labor markets. Unemployment climbed to 8.9%, in line with expectations.
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