Thank you very much;
you're only a step away from
downloading your reports.
Emerging Markets Can't Rescue US Stocks From Downward Reversal
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

One of the morning's big stories focused on comments from ECB Chief Economist Peter Praet, considered the de facto spokesman for President Mario Draghi. Praet stated that the central bank was prepared to lower its main lending rate, offer funding loans to banks, or set a negative deposit rate. Large-scale asset purchases would only be utilized if growth and inflation did not live up to the ECB's projections. In addition, an unnamed source told Reuters that a rate cut was a near certainty for the June 5 meeting.

US Treasuries rallied strongly today after comments from Bank of England Governor Mark Carney indicated that the central bank would likely hold rates low until mid-2015, about a quarter longer than had been expected. This caused the gilt market to reprice toward that later date, and the 5-year gilt yield fell 11.1 basis points. Treasuries were dragged along on this rally, pushing the 10-year yield down as much as eight basis points and out of a trading range it has been stuck in all year. The yield of 2.53% was its lowest level this year.

The major US stock indices opened the day marginally lower and trended down for the remainder of the session. Selling intensified during the last hour, and the S&P 500 (INDEXSP:.INX) closed down 0.47%, which left it back near the level it opened on Monday. Small-cap stocks noticeably underperformed while most emerging market equities gained. Consumer discretionary, industrials, financials, and consumer staples were all notable laggards in today's session.

The producer price index of final demand for April rose 2.1% from a year ago, well above the +1.7% expected by economists and faster than the 1.4% rate last month. The increase was linked to a sizable jump in food prices and trade services. However, the market's takeaway was that companies wouldn't be able to pass on these recent input price increases and it was actually a negative. Tomorrow's consumer price index will decide whether or not that concern is correct.

Tomorrow's Financial Outlook

Tomorrow morning, the April consumer price index will be released, which will complete the other half of the inflation picture. Prices are expected to rise 2.0% from a year ago after increasing 1.5% in March. Because the producer price index showed such a dramatic increase in April, market participants will be watching closely to see if companies were able to pass along those price increases to consumers. Also scheduled to be released is the May New York regional manufacturing survey, the first of its kind for the month of May. The last two reports scheduled for tomorrow are March long-term capital (TIC) flows and weekly jobless claims.

The main catalyst for risk assets overnight is the preliminary release of Japan's first-quarter GDP. Its result should have a significant effect on the USDJPY currency pair and, by extension, US equities. Also scheduled to be released are preliminary first-quarter GDPs from the eurozone, France, and Germany. The last piece of data is the final April eurozone consumer price index.

Tomorrow is the busiest day of the week for earnings, with 12 companies reporting. Notable reports include Wal-Mart (NYSE:WMT), Kohl's (NYSE:KSS), J.C. Penney (NYSE:JCP), Autodesk (NASDAQ:ADSK), Nordstrom (NYSE:JWN), and Applied Materials (NASDAQ:AMAT).


Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Emerging Markets Can't Rescue US Stocks From Downward Reversal
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

One of the morning's big stories focused on comments from ECB Chief Economist Peter Praet, considered the de facto spokesman for President Mario Draghi. Praet stated that the central bank was prepared to lower its main lending rate, offer funding loans to banks, or set a negative deposit rate. Large-scale asset purchases would only be utilized if growth and inflation did not live up to the ECB's projections. In addition, an unnamed source told Reuters that a rate cut was a near certainty for the June 5 meeting.

US Treasuries rallied strongly today after comments from Bank of England Governor Mark Carney indicated that the central bank would likely hold rates low until mid-2015, about a quarter longer than had been expected. This caused the gilt market to reprice toward that later date, and the 5-year gilt yield fell 11.1 basis points. Treasuries were dragged along on this rally, pushing the 10-year yield down as much as eight basis points and out of a trading range it has been stuck in all year. The yield of 2.53% was its lowest level this year.

The major US stock indices opened the day marginally lower and trended down for the remainder of the session. Selling intensified during the last hour, and the S&P 500 (INDEXSP:.INX) closed down 0.47%, which left it back near the level it opened on Monday. Small-cap stocks noticeably underperformed while most emerging market equities gained. Consumer discretionary, industrials, financials, and consumer staples were all notable laggards in today's session.

The producer price index of final demand for April rose 2.1% from a year ago, well above the +1.7% expected by economists and faster than the 1.4% rate last month. The increase was linked to a sizable jump in food prices and trade services. However, the market's takeaway was that companies wouldn't be able to pass on these recent input price increases and it was actually a negative. Tomorrow's consumer price index will decide whether or not that concern is correct.

Tomorrow's Financial Outlook

Tomorrow morning, the April consumer price index will be released, which will complete the other half of the inflation picture. Prices are expected to rise 2.0% from a year ago after increasing 1.5% in March. Because the producer price index showed such a dramatic increase in April, market participants will be watching closely to see if companies were able to pass along those price increases to consumers. Also scheduled to be released is the May New York regional manufacturing survey, the first of its kind for the month of May. The last two reports scheduled for tomorrow are March long-term capital (TIC) flows and weekly jobless claims.

The main catalyst for risk assets overnight is the preliminary release of Japan's first-quarter GDP. Its result should have a significant effect on the USDJPY currency pair and, by extension, US equities. Also scheduled to be released are preliminary first-quarter GDPs from the eurozone, France, and Germany. The last piece of data is the final April eurozone consumer price index.

Tomorrow is the busiest day of the week for earnings, with 12 companies reporting. Notable reports include Wal-Mart (NYSE:WMT), Kohl's (NYSE:KSS), J.C. Penney (NYSE:JCP), Autodesk (NASDAQ:ADSK), Nordstrom (NYSE:JWN), and Applied Materials (NASDAQ:AMAT).


Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Emerging Markets Can't Rescue US Stocks From Downward Reversal
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

One of the morning's big stories focused on comments from ECB Chief Economist Peter Praet, considered the de facto spokesman for President Mario Draghi. Praet stated that the central bank was prepared to lower its main lending rate, offer funding loans to banks, or set a negative deposit rate. Large-scale asset purchases would only be utilized if growth and inflation did not live up to the ECB's projections. In addition, an unnamed source told Reuters that a rate cut was a near certainty for the June 5 meeting.

US Treasuries rallied strongly today after comments from Bank of England Governor Mark Carney indicated that the central bank would likely hold rates low until mid-2015, about a quarter longer than had been expected. This caused the gilt market to reprice toward that later date, and the 5-year gilt yield fell 11.1 basis points. Treasuries were dragged along on this rally, pushing the 10-year yield down as much as eight basis points and out of a trading range it has been stuck in all year. The yield of 2.53% was its lowest level this year.

The major US stock indices opened the day marginally lower and trended down for the remainder of the session. Selling intensified during the last hour, and the S&P 500 (INDEXSP:.INX) closed down 0.47%, which left it back near the level it opened on Monday. Small-cap stocks noticeably underperformed while most emerging market equities gained. Consumer discretionary, industrials, financials, and consumer staples were all notable laggards in today's session.

The producer price index of final demand for April rose 2.1% from a year ago, well above the +1.7% expected by economists and faster than the 1.4% rate last month. The increase was linked to a sizable jump in food prices and trade services. However, the market's takeaway was that companies wouldn't be able to pass on these recent input price increases and it was actually a negative. Tomorrow's consumer price index will decide whether or not that concern is correct.

Tomorrow's Financial Outlook

Tomorrow morning, the April consumer price index will be released, which will complete the other half of the inflation picture. Prices are expected to rise 2.0% from a year ago after increasing 1.5% in March. Because the producer price index showed such a dramatic increase in April, market participants will be watching closely to see if companies were able to pass along those price increases to consumers. Also scheduled to be released is the May New York regional manufacturing survey, the first of its kind for the month of May. The last two reports scheduled for tomorrow are March long-term capital (TIC) flows and weekly jobless claims.

The main catalyst for risk assets overnight is the preliminary release of Japan's first-quarter GDP. Its result should have a significant effect on the USDJPY currency pair and, by extension, US equities. Also scheduled to be released are preliminary first-quarter GDPs from the eurozone, France, and Germany. The last piece of data is the final April eurozone consumer price index.

Tomorrow is the busiest day of the week for earnings, with 12 companies reporting. Notable reports include Wal-Mart (NYSE:WMT), Kohl's (NYSE:KSS), J.C. Penney (NYSE:JCP), Autodesk (NASDAQ:ADSK), Nordstrom (NYSE:JWN), and Applied Materials (NASDAQ:AMAT).


Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

EDITOR'S PICKS
 
WHAT'S POPULAR