China's official large manufacturing PMI for March showed a very slight increase in month-on-month growth, rising to 50.3 from 50.2 last month (versus the 50.1 that was expected). The final estimate of the private Markit survey of small manufacturers declined to an index reading of 48.0 from the initial estimate of 48.1. In addition, large manufacturers reported an uptick in export orders. After China's disastrous February trade balance, which showed an extreme drop in exports, this was viewed as a positive by market participants.
US equities continued where they left off yesterday, led by a very strong performance from tech stocks. Large-cap tech was the leader in the sector with stocks such as Google (NASDAQ:GOOG) and Cisco (NASDAQ:CSCO) outperforming.
Shares of biotech giant Gilead Sciences (NASDAQ:GILD) rallied 4.08% to $73.75 after the Wall Street Journal published an article discussing the strong sales and high price of Hepatitis C treatment Sovaldi. Gilead also benefited from a rebound in the biotech sector.
The national ISM manufacturing index showed a slight increase of growth to 53.7 in March from 53.2 the month prior. The current month's reading was a bit below the 54.0 that was expected. Under the surface, production, new orders, and order backlogs all rose, which is viewed as a positive. The increase in order backlogs took the component to the highest single-month reading in three years. Conversely, the employment component saw a small drop from the prior month.
Tomorrow's Financial Outlook
The main event tomorrow is the March ADP private payrolls report. The report will give the most significant sneak preview to Friday's official nonfarm payrolls release. Many market participants expect the report to show more growth than the economist estimate of 195,000 as companies increase hiring that was delayed due to extreme weather in January and February. The other report for the day is February factory orders, which will contribute to first-quarter GDP estimates.
There are no significant global economic reports scheduled for tomorrow. The UK will report nationwide home prices for February and the Bank of Japan will release the size of its monetary base expansion in March.
The only notable earnings report scheduled for tomorrow is from Monsanto (NYSE:MON).
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