The S&P 500 (INDEXSP:.INX) continued to vacillate in its recently established trading range between 1860 and 1895. With implied volatility continuing to remain depressed, it's only a matter of time until the benchmark index breaks free. The small-cap Russell 2000 (INDEXRUSSELL:RUT) underperformed by more than 1% on a beta-adjusted basis today, which is the opposite performance of the prior two days. Clearly, investors don't have any great conviction on future market direction at the current time, as trading volumes remained near their lowest of the year for the second straight day.
Telecom stocks struggled for a second straight day. Verizon's (NYSE:VZ) chairman said at an investor conference today that the company saw no need to pursue a satellite firm, despite media reports to the contrary yesterday. Dish Network (NASDAQ:DISH), which was reported to be in talks with Verizon over a potential purchase, was down as much as 4% today.
New York Fed President Bill Dudley said in a speech today that it's likely the central bank will need to keep interest rates low for an extended period of time due to structural headwinds in the US economy. Although he's not sure what level that might be, he thinks it would be below 4.25%. In addition, he sees a relatively slow pace of tightening once it becomes necessary.
Tomorrow's Financial Outlook
For the third straight day, there will be no major economic data released tomorrow. The one event of note is the Fed's release of the minutes from the FOMC meeting that was earlier this month. The minutes will likely reveal any updated metrics for the Fed's employment guidelines, changes to the reverse repo facility, and the possibility that the long-term equilibrium rate is much lower than it had previously anticipated.
Fed Chair Janet Yellen will give the commencement speech at NYU tomorrow morning, although that's a very unlikely place for her to give any new direction on monetary policy. Presidents Dudley, George, and Kocherlakota are also scheduled to give speeches.
The UK will release its retail sales from April tomorrow morning. The other two events of note overnight are the advance estimate of May eurozone consumer confidence and April Australian consumer confidence. The eurozone measure is expected to trend up to -8.3 from -8.6 last month. Surveys taken by the IFO and ZEW showed that investor expectations continued to fall.
There are seven notable companies scheduled to report earnings tomorrow. Those reports are from Booz Allen Hamilton (NYSE:BAH), Lowe's (NYSE:LOW), PetSmart (NASDAQ:PETM), Target (NYSE:TGT), L Brands (NYSE:LB), NetApp (NASDAQ:NTAP), and Tiffany (NYSE:TIF).
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