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Dollar Squeeze, Mixed Data Keep Stocks in Check


Today's financial recap and tomorrow's financial outlook.


US economic data was mixed today.

The Consumer Price Index rose 0.2% in February, which was in-line with expectations. But the core reading, which excludes volatile food and energy prices was higher-than-expected.

February New Home Sales were 539,000, beating Wall Street's 464,000 consensus by 16%.

The January FHFA House Price Index rose 0.3%, failing to match the expected 0.5% gain.

Finally, the March Richmond Fed Manufacturing Index missed by a wide margin at -8, while the March Markit US Manufacturing PMI was an impressive 55.3.

The S&P 500 failed to break out of its trading range as the mixed economic data, combined with ongoing currency volatility, kept traders on edge.

The US dollar's recent drop helped fuel the recent stock market rally, and today, it started rising this morning after the release of the CPI report.

Some traders believe rising inflation trends could push the Fed off its current dovish perk, which would presumably drive the dollar higher.

However, it's important to keep in mind that the dollar was likely oversold, having come off its worst week since 2009.

The dollar pulled back in the afternoon, but stocks couldn't recover, and traders bid up US Treasuries, pushing the 10-Year Treasury Yield down 3.7 bps to 1.878%.

In stocks news, copper miner Freeport-McMoRan (FCX) fell 0.8% to $19.18 after cutting its quarterly dividend by 84% due to weak commodity price trends. However, the stock finished well off its lows.

For the second straight day, the NASDAQ Biotechnology Index ETF (IBB) exhibited relative weakness as traders continue to take profits in the sector, which led the market up earlier in the year. IBB finished down 0.7% at $355.95.

In the win column, social media powerhouse Twitter (TWTR) shot up 6.2% to $51.47 despite a lack of meaningful news, while Netflix (NFLX) jumped 3.1% to $438.28 on a bullish analyst note from Cantor Fitzgerald.

Tomorrow's Financial Outlook

Wednesday's major economic data point will be the February Durable Goods Report, which comes out at 8:30 a.m. ET.

The weekly MBA Mortgage Index and crude oil inventory numbers will also be released.

There are no major companies reporting earnings.

Twitter: @T3Live

No positions in stocks mentioned.
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