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Despite Increasing Tensions in Ukraine, S&P 500 Makes New Record Highs


End of Day Roundup 02/27: Today's financial recap and tomorrow's financial outlook.

News reports early this morning that unidentified Russian and Ukrainian gunmen had captured two buildings in the Crimea prompted investors to move capital into safe government assets. German Bunds, UK Gilts, and US Treasuries all edged higher today. Due to weakness in the Russian ruble, the US dollar / Russian ruble FX cross (USDRUB) reached new highs for the second consecutive day. The Brazilian IBOVESPA (INDEXBVMF:IBOV) rose 2.16% in today's session, making it the top-performing index in the Americas. Last night, the Brazil Central Bank only raised its benchmark policy rate by 25bps, following six consecutive hikes of 50bps.

US equities meandered around unchanged in early trading and climbed steadily higher throughout the rest of the session, eventually closing at new record highs in the S&P 500 (INDEXSP:.INX). The benchmark index gained 0.49% today, closing above the prior record high of 1848.38. This was viewed as significant by many investors, as the S&P had tried and failed to close above this mark over the last two weeks.

Durable goods orders fell by 1.0% in January, less than the -1.7% decline expected by economists. The more closely watched index of durable goods orders ex-transports had a surprise increase of 1.1% in the month, better than the -0.3% expected. Capital goods shipments in the month dropped 0.8% in the month, causing some economists to revise their first-quarter GDP report estimates lower.

Struggling retailer JC Penney (NYSE:JCP) finally got some relief following its earning report last night. The company expects positive comparable sales in the first quarter of 2014 and noted an increasingly improving liquidity situation. The stock received a number of analyst upgrades today, which helped it rally 25.13%.

Tomorrow's Financial Outlook

Tomorrow morning the first revision of fourth-quarter US GDP will be released. Due to worsening exports in December and declining consumption growth, the initial estimate should be revised down to 2.5%, from 3.2%, annualized quarterly growth. Also due to be reported is the regional Chicago manufacturing index for February. The index, always closely followed by investors, is expected to decline to 56.4 from 59.6 in the month prior.

A large amount of Japanese economic data is scheduled to be reported this evening, including reports on January employment, January housing starts, the consumer price index, industrial production, retail sales, and preliminary February manufacturing. In addition, Germany's January retail sales, the February eurozone unemployment rate, and February eurozone consumer price index are scheduled for release.

Because tomorrow is Friday, there will not be many earning reports to follow. Iron Mountain (NYSE:IRM), Newcastle Investment (NYSE:NCT), Southwestern Energy (NYSE:SWN), 3D Systems (NYSE:DDD), and Liberty Media (NASDAQ:LMCA) are scheduled to report tomorrow morning.

Twitter: @Minyanville

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