Ukraine Continues to Drive Stock Trading
Today's financial recap and tomorrow's financial outlook.
Utilities stocks bounced back above their 200dma as interest rates fell. This defensive sector of the market was down 3% for the week as of yesterday's close and was able to muster a 1.2% bounce today. The S&P 500 (SPX) ended up finishing the day down 0.6%. At one point, following the ECB meeting, it was up 0.5%. Volatility is certainly rising.
US Treasuries rallied strongly, breaking their year-to-date low yields with 5, 7, and 10-year notes the best performers.
Weekly initial jobless claims fell to 289K last week, below the expected 304K. The 4-week moving average of 293.5K iss the lowest its been since 2006. Consumer credit for June fell short of estimates, rising at an annualized rate of $17.25 billion (versus $18.65 billion expected).
The ECB left its policy unchanged, as expected. During his press conference, President Mario Draghi reiterated the central bank's commitment to keep a highly accommodative monetary policy stance and said the bank has made increased progress on its ABS purchase program.
Tomorrow's Financial Outlook
Two of the economic reports scheduled for tomorrow are preliminary second-quarter nonfarm productivity and unit labor costs. Earlier this month, the employment cost index showed its largest jump in the recovery, thanks to a record jump in costs for benefits. June wholesale inventories are also scheduled to be reported, and are expected to rise 0.8% for the month. If the preliminary second quarter GDP report is any gauge, the growth in June should be strong.
Two major catalysts are due overnight, the Bank of Japan (BoJ) rate decision and China's July trade balance. With regards to the BoJ, it is likely to err on the dovish side with its commentary, although further action is unlikely. China's net exports will likely glean some interesting details. Last month, the report showed that China had been stockpiling oil. Additionally, copper imports have been improving as economic activity has improved within the country.
The only earnings report of note tomorrow is from PDC Energy (PDCE).
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