Markets Confused After Poor GDP Data, Fed Release
Today's financial recap and tomorrow's financial outlook.
The S&P 500 bounced around today on weak economic data and an ambigous Fed.
US GDP rose just 0.2% in the first quarter. Analysts were expecting growth of 1%. The news sent stock futures lower before market rallied into the release of the Fed's rate decision.
As expected, the Fed left the benchmark rate unchanged. There were also no major surprises in the Fed statement.
The Fed didn't give any indications of a more hawkish outlook, though it said that the winter economic slowdown was transitory in nature. The Fed reiterated it was confident that inflation would reach the 2% range in the intermediate term.
Stocks trade sideways after the Fed release, and the S&P 500 finished at 2106.85, up 0.4%.
The poor GDP number sent the dollar up against the euro, and as a result European stocks fell sharply, with most indices down 2% or more.
European bond yields rose sharply, with the German 10-year bund yield rising 12.2 bps to 0.285%.
Salesforce.com (CRM) rose 11.6% after Bloomberg reported that the company hired bankers to handle takeover inquiries.
Mylan (MYL) upped its bid offer for Perrigo (PRGO) from $30 billion to $35.4 billion. Perrigo chairman Joseph C. Papa stated that he believes the $30 billion offer undervalued the company. Mylan is pushing to acquire Perrigo as a defense after it rejected a takeover offer from $41 billion by Teva Pharmaceuticals (TEVA).
Twitter (TWTR) shares fell 8.9% during trading today. The fall came after the company's disappointing earnings report, which was leaked early yesterday afternoon. The company beat on EPS, but missed on metrics such as revenue and user growth, scaring investors into selling.
Oil futures are trading at 4-month highs today. US crude oil inventories rose by 1.9 million barrels, below analysts' expectations of 2.3 million barrels. The lower dollar also boosted oil prices.
Starwood Hotels (HOT) rose 8.3% today after the company announced it would look into strategic alternatives to boost shareholder value. Management said that no option is off the table. MLV & Co. analyst Ryan Meliker believes that company may be looking into a possible sale. He believes that the company would fetch at least $100 per share.
GoPro (GPRO) shares surged over 12.6% today. The company reported its earnings last night, beating expectations on the top and bottom lines. EPS was $0.24 a share vs. analysts' expectations of $0.18. Revenues rose 54% to $363.1 million, beating the $341 million expected. GoPro also announced it will acquire French virtual reality company Kolor.
Thursday's Financial Outlook
Tomorrow's US economic announcements include the employment cost index, PCE reports, Personal Spending, PCE Deflator, Jobless Claims, ISM Milwaukee, Chicago Purchasing Manager, and EIA Nautral Gas Storage Change.
Overseas there will be the European CPI, European unemployment rate, Japan's housing starts, CPI, household spending and the Bank of Japan's Semi-Annual Outlook Report.
For earnings, before the opening bell we have Cardinal Health (CAH), Celgene (CELG), Cigna (CI), ConocoPhillips (COP) and Exxon Mobil (XOM).
After the close, we have Expedia (EXPE), Gilead (GILD), and Visa (V).
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