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S&P 500 Breaks to New All-Time Highs


Today's financial recap and tomorrow's financial outlook.

US equities continued their advance today after a weaker open. Once the market opened, there was sharp buying interest that continued until noon. All 10 S&P sectors were in the green, led by tech and health care; energy and materials were the laggards. Breadth on the NYSE was a strong 4.5:1 skewed to buy. The S&P closed at a new all-time high of 1587.73. The Nasdaq was the leading index today, closing up 1.81%.

The Federal Reserve released the minutes from its March meeting early at 9 a.m. EDT instead of its usual time of 2 p.m. EDT. This was due to an inadvertent early release of the minutes to several members of Congress. The minutes stated that FOMC members looked into a potential slowing of the latest round of asset purchases during the summer with an eventual end sometime in early 2014. However, it must be pointed out that these minutes are somewhat stale as the meeting took place before the weak March payroll figures. In fact, Atlanta Fed President Dennis Lockhart, a moderate, made the case in a speech this morning for additional asset purchases if the economy continues to weaken.

China's trade balance turned into a deficit in one of the select few instances where this has been the case during the past 20 years. China's trade surplus of $15.23 billion became a deficit of $880 million led by a sharp increase in imports from Taiwan. The estimate was for a surplus of $15.15 billion. This was construed as bullish, but we're not really sure why.

The US Treasury reopened $21 billion of 10-year notes at a high yield of 1.795%, a full 23 basis points below last month's auction. The auction was met with decent demand from direct bidders, but coverage ratios were weak at 2.79 vs. the 2.92 10-auction average. The benchmark 10-year Treasury yield rose 5.5 basis points to 1.805%. Gold and the other metals were weak; gold fell 1.81% and silver was down 1.13%.

In post-market earnings, Bed Bath & Beyond (NASDAQ:BBBY) had inline EPS and revenues at $1.68 and $3.40 billion. Forward EPS guidance was lower. 1Q EPS was guided at $0.88-$0.94 vs $0.95 estimates.

Tomorrow's Financial Outlook

Tomorrow morning, we will receive weekly jobless claims and import price data. Last week, claims spiked to 385,000 from 357,000 the week prior. The consensus for this week is 360,000 and the 4-week moving average stands at 354,300 due to a string of low reports in the month of March. The import price index is expected to show a monthly decline of 0.5% after rising 1.1% the month prior. The Treasury will reopen $13 billion in 30-year bonds.

In global earnings, Australia will report employment figures from March and Germany will report on the final estimate of March consumer inflation. Australia's unemployment rate is forecast to remain unchanged at 5.4%, though payrolls are expected to show a 7,500 drop. German inflation figures are expected to remain unchanged at 1.4% in the second estimate.

Major earning reports for tomorrow include Rite Aid (NYSE:RAD).

Twitter: @Minyanville

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