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Bond Yields Keep on Burnin', Stock Markets Keep on Churnin'


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

Markets closed slightly lower today ollowing mixed economic news and a lower dollar.

US Factory Orders fell 0.4% in April, broadly missing the -0.10%, consensus.

June IBD/TIPP Economic Optimism came in at  48.1, below the 49.8 expected.

The ISM New York fell to 54 in Mayvs. the 58 consensus.

The US dollar dropped in value against the Euro after the EU posted positive inflation data and  prospects for a Greek deal came back on the horizon.

The Global X FTSE Greece 20 ETF (GREKL) rallied 2.5%, showing optimism towards a resolution.

All three major indices closed down, lead by the DJIA, which fell 0.16%.

The Russell 2000 outperformed, closing up 0.17%.

Bond yields were up. The US 10-Year Yield rose 8.3 bps to 2.2624%.

Sectors were all over the place.

The S&P Regional Banking ETF (KRE) rose 1.3% on the increase in rates.

The energy sector was also strong as the weak dollar boosted oil.

Transports performed well today despite the rise in oil prices.

The utilities sector took the biggest hit today, the Utilities Select Sector SPDR ETF (XLU) fell 1.3%. Real Estate took second place, the iShares US Real Estate ETF (IYR) closed down 0.8%.

Biotech didn't fare well either. The S&P Biotech ETF (XBI) declined 0.1%, while NASDAQ Biotechnology ETF (IBB) dropped 0.4%.

Macy's (M) rallied 2.5% on reports that hedge funds were asking the company to evaluate its real estate assets, the sale of which could presumably unlock shareholder value.

Fitness tracker maker FitBit announced that it will price its IPO at $14-$16 per share, giving the company a valuation just above $3 billion. Shares will trade on the NYSE under the ticker FIT.

European markets closed mostly down today. Germany's DAX fell -0.94% and France's CAC lost 0.41%.

European bonds yields spiked today on the EU's strong inflation data nd the Greek optimism. The German 10-year Bund yield rose 17.3 bps while the French 10-year yield gained 16.1 bps.

Asian market experienced a slight cool-off from their rally yesterday. Japan's Nikkei dropped 0.13% and the Hong Kong Hang Seng Index closed down 0.47%.

However, the Shanghai Composite came out on top and rallied 1.69%.

Wednesday's Financial Outlook

US economic data for tomorrow will include MBA Mortgage Applications, ADP Employment Change, Trade Balance for April, Markit US Composite and Services PMI, ISM Non-Manf. Composite, and DOE US Oil reports. Also, the Federal Reserve will release its beige book.

Overseas, we have Britain's nationwide OUS prices and Markit services/composite PMI, the EU's employment and retail sales report, OECD's Economic Outlook, the European Central Bank Rate Decision, and Australian Trade Balance data.

Tomorrow's earnings announcement includes Brown-Forman (BF.B) before the open and Dresser-Rand (DRC) after the close.
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