Two hours into trading, Citigroup (C 0.39%) is up 0.8%, riding the market wave of reassuring -- or at the very least not terrifying -- congressional testimony from Federal Reserve Chairman Ben Bernanke. Monday's positive second-quarter earnings report isn't hurting the stock's performance today either.
The Great Oz has spoken
Bernanke is testifying on monetary policy today before the House Committee on Financial Services; tomorrow he'll do the same before the Senate banking committee. Most on the minds of investors is the fate of quantitative easing, which the markets have come to depend on over the last four years, at least psychologically.
So far, Bernanke's comments seem to indicate that the Fed remains on course to begin tapering QE later this year, so long as U.S. economic data remains positive. But at the same time, the central bank believes the economy is clearly not where it should be -- thus indicating the continuation of accommodative monetary policy.
Foolish bottom line
In fact, more than just indicating continuing accommodative monetary policy, Bernanke is explicitly committing the central bank to it: "With unemployment still high and declining only gradually," the Fed chairman said, "and with inflation running below the Committee's longer-run objective, a highly accommodative monetary policy will remain appropriate for the foreseeable future."
Yet Bernanke hasn't backed off on tapering. He's trying to have it both ways: keep the tapering plan in place and reassure the markets the Fed will be there to support the U.S. economy. Normally, that sort of thing doesn't work, but today, it seems to be. Not only are Citi and its Big Four peers trading up, so are the markets in general, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq all currently in the green.
Naturally, Citi's strong second-quarter results are also keeping the bank's investors happy today. On Monday, Citi reported that net income for Q2 grew by 42% year over year, while total revenue grew by 11%. Earnings per share were $1.34, up from $0.95 a year ago. The bank grew its business in key, fundamental areas as well -- in deposits and loans, for instance.
So, Citi investors have reason to be happy so far today and this week, but also remember that investing Foolishly means investing for the long term: tuning out market noise -- like today's -- and focusing on the fundamentals of the companies you're invested in. Check on your stocks once a month, or even once a quarter, and leave the daily ticker checks to the day traders: Your portfolio will thank you, even if your broker won't.
