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Markets Slaughtered on Rising Dollar and Fed Rate Fears


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

Markets finished down across the board as positive economic data boosted the dollar and triggered a selloff in equities and commodities.

The US dollar surged as strong economic data showing increased business investment spending, higher consumer confidence, and housing price gains in April and March.

All three major indices fell more than 1%, led by the NASDAQ as Apple (AAPL) closed down more than 2% down.

The Russell 2000 finished down 1.1%.

Crude oil prices fell 3% on the stronger dollar and fears that US output will begin to rise.

Commerzbank analyst Carsten Fritsch stated that the 23-week decline in US drilling activity appears to have stopped, spurred by the jump in prices in the past weeks.

Bond yields jumped on the positive economic data which may give ground for the Federal Reserve to increase rates. Long-term bond yields fell on concerns about Greeece and global economic growth.

Energy was the worst-performing S&P 500 sector due to the drop in oil prices. Transports were also hit hard despite the oil price drop.

Cybersecurity didn't fare well either as the ISE Cyber Security ETF (HACK) fell 1.3%.

Biotech wasn't safe either as the NASDAQ Biotechnology ETF (IBB) dropped 1.1%.

Time Warner Cable (TWC) rallied 7.3% after it was announced that Charter Communications (CHTR) will acquire the company for $56 billion. Should the deal be approved by the government, CHTR will go from having 4 million subscribers to 18 million. CHTR rose 2.5%

EMC Corporation (EMC) fell 2.1% after it said it will acquire the privately-held Virtustream for $1.2 billion.

Shake Shack (SHAK) ended its 6-day 40%+ rally, closing down 7.7%.

European market fell on growing concerns that Greece may default on its loan repayment. Germany's DAX fell 1.6%, and UK's FTSE 100 tumbled 1.2%.

European bond yields also showed investors shedding risk, with the 10-year bund down 5.9 bps, while Italian and Spanish yields jumped.

Asian markets had a good rally as the Hong Kong Hang Seng Index rallied 0.9% and the Shanghai Composite surged1.9%. Japan's Nikkei finished up 0.1% at 20,437.5.

Wednesday's Financial Outlook

Tomorrow will be a quiet day for US economic news. We have MBA Mortgage Applications as the lone report.

On the global data front, we have Japanese small business confidence and large retailers' sales, the Swiss UBS consumption indicator, the Bank of Canada's rate decision, and China's leading index.

Tomorrow's pre-market earnings announcements include Brown Shoe (BWS), Chico's FAS (CHS), Michael Kors (KORS), Tiffany & Co. (TIF), Toll Brothers (TOL), and Valspar (VAL). After the close, we'll see numbers from Aegean Marine Petrol (ANW), Costco (COST), and Spartan Stores (SPTN).
No positions in stocks mentioned.
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