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China, Gold Soar as Biotech Takes Another Big Hit

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Today's financial recap and tomorrow's financial outl

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China resumed its incredibly rally as the Shanghai and Shenzen Composites rose an impressive 1.7% and 2.4%, respectively.

The country's March Manufacturing PMI was 50.1, beating the 49.7 consensus. Traders have been aggressively bidding up Chinese equities despite an economic slowdown due to expectations of heavy stimulus from the People's Bank of China, and the data only emboldened the bulls.

European economic data was also strong. Markit PMI numbers for the Euro-Zone, Italy, France, and Germany were all ahead of expectations, extending Europe's streak of positive economic data surprises.

German bonds rose for the sixth day in a row was the country sold 5-year debt at a record low yield of -0.1%. Yields on two, 10 and 30-year bunds all hit record lows today, according to Bloomberg data. Traders have been aggressively buying bunds and other European assets in an effort to benefit from the European Central Bank's bond buying program.

US economic data was mixed today.

ADP said businesses added 189,000 jobs in March, easily missing the 225,000 consensus. The ISM Manufacturing Index fell to 51.5 in March, missing expectations.

On the plus side, the Markit US Manufacturing PMI rose to 55.7 in March, edging out the 55.3 Wall Street expected.

US equities took another break today, with the S&P 500 falling 0.4% to 2059.69.

And for the second straight day biotech led the way down. The NASDAQ Biotechnology Index ETF (IBB) dropped 1.0% as traders continue to take profits in high-risk names. Other speculative sectors like cybersecurity and social media also suffered.

Investment bank Jefferies initiated coverage on Twitter (TWTR) with a Buy rating and $65 target price. Twitter initially rose 3.2% to $51.69, but it got caught in the broader selloff and finished at $50.47, up 0.8%.

US Treauries caught a bid today amidst the stock selloff, and the 10-Year Treasury fell 6 bps to 1.864%.

And with the dollar dropping and the safety trade back in play, gold rose 1.8% to $1204.50, pushing mining stocks up sharply. The Market Vectors Gold Miners ETF (GDX) rose 5.3% to $19.21.

Tomorrow's Financial Outlook

Thursday will be another busy day with data as we have Challenger Jobs Cuts, Jobless Claims, Trade Balance, ISM New York, Factory Orders, and Natural Gas data on tap.

CarMax (KMX) reports earnings before the open.

With the bears back in control and risk out of style, traders will be watching high-beta sectors like biotech for signals for near-term market direction.

Twitter: @T3Live
No positions in stocks mentioned.
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