China Targets Economic Slowdown for Termination, Stocks Soar
Today's financial recap and tomorrow's financial outlook.
China was the top performing major global market today after its central bank once again pledged to support the nation's slowing economy.
PBoC governor Zhou Xiaochuan said the bank stands ready to cut interest rates and bank reserve requirements to fight deflationary risks.
Additionally, down payment requirements for second homes were lowered, and sellers of homes will now be exempt from a 5.6% transaction tax on properties held longer than two years. These measures are aimed at supporting the Chinese housing market.
The Shanghai Composite rose 2.6%, while the iShares FTSE/Xinhua China 25 Index ETF (FXI) was up 3.8%.
Health care M&A was hot today, with three major transactions announced this morning before the open.
Health insurance giant UnitedHealth (UNH) is buying pharmacy benefits manager Catamaran (CTRX) for $12.8 billion.
And Teva Pharmaceuticals (TEVA) is picking up Auspex Pharmaceuticals (ASPX) for $3.5 billion, while Horizon Pharma (HZNP) is acquiring Hyperion Therapeutics (HPTX) for $1.1 billion.
Additionally, Merck (MRK, Intrexon (XON), and Ziopharm Oncology (ZIOP) announced a global drug collaboration effort.
The S&P 500 rose 1.2% to 2086.24, with banks, homebuilders, and cybersecurity stocks leading the way.
The Russell 2000 also impressed with an 1.4% gain.
Tesla (TSLA) had a strong day after CEO Elon Musk Tweeted that Tesla would unveil a non-car addition to its product line on April 30. Traders widely expect Tesla to reveal a home battery system which would link up with solar panels
Economic data was mixed today.
Personal income was above consensus expectations, while personal spending was a bit light. The PCE deflator, which is the Fed's preferred inflation measure, rose 1.4% year-over-year, just ahead of the expected 1.3%.
The Dallas Fed manufacturing Activity Index was -17.4, a significant miss.
Tomorrow's Financial Outlook
We'll have some economic data to chew on tomorrow morning with the release of ISM Milwaukee, S&P/Case-Shiller, Chicago PMI, and Consumer Confidence numubers
On the global front, we'll see Euro-Zone CPI, German employment, and Canadian GDP numbers.
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