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Specter of Conflict Eases in Ukraine, Boosting Global Risk Assets


End of Day Roundup 03/04: Today's financial recap and tomorrow's financial outlook.

Russian President Vladimir Putin said early this morning that there was no reason to send troops into Ukraine, and that his country had no intention of absorbing Crimea. Additionally, Russian troops were returning to their bases following military exercises that were scheduled to conclude yesterday. However, this does not include the Russian soldiers currently stationed in Crimea, who were sent in at the request of former Ukraine PM Yanukovych to protect against extremist forces. The US government announced a $1 billion aid package for the country and is sending technical advisers to Ukraine to help its new government manage its finances.

Global equities rebounded strongly on the news that the conflict in Ukraine was simmering. The Russian MICEX index bounced back 5.28% in today's session after losing 10.68% yesterday and is now down 6.11% from last Friday's close. US and European stocks also reacted positively. The US S&P 500 (INDEXSP:.INX) gained 1.52%, and the German DAX (INDEXDB:DAX) gained 2.46%. The US small-cap Russell 2000 (INDEXRUSSELL:RUT) rose to a new record high today, up 2.92% for the day.

All 10 basic S&P sectors were in the green today, led by the health-care, financials, and industrial sectors. President Obama released his 2015 budget proposal, which included a record $3.9 trillion in spending. Additionally, the inherent growth forecasts within the proposal reveal expectations that the US will experience the strongest growth in the next fiscal year since 2005.

This morning, Qualcomm (NASDAQ:QCOM) announced a $5 billion addition to the company's share repurchase program, bringing its total authorization to $7.8 billion. In addition, it raised its quarterly dividend by 20% to $0.42 per share. Qualcomm was up 3.15% on the day.

Tomorrow's Financial Outlook

Tomorrow morning we'll get a preliminary look at February employment with the ADP private payrolls report. The payrolls report is estimated to show an increase of 155,000 jobs in the month after an increase of 175,000 in the month prior. Also scheduled for release is the national ISM services index, which is forecast to decline modestly to a reading of 53.5 from 54.0 in January. Lastly, the Fed will release its Beige Book, a report on the business conditions in the different Fed districts from the last six weeks.

There is also a slew of global economic data scheduled to be reported tomorrow. Australia's fourth-quarter GDP is due out overnight. Early tomorrow morning, the eurozone's January retail sales and its preliminary fourth-quarter GDP are scheduled to be released. In Asia, the Chinese HSBC/Markit services PMI will be reported. Lastly, the Bank of Canada will make its monthly rate decision at 10:00 a.m. EST.

The only notable earnings reports scheduled for tomorrow are PetSmart (NASDAQ:PETM) and Canadian Solar (NASDAQ:CSIQ).

Twitter: @Minyanville

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