Stocks Mixed in Lackluster Session…..

U.S. equities finished mixed, with the markets weighing a hotter-than-expected read on March consumer price inflation as well as news of a suspension in the distribution of a major vaccine in the U.S. The CDC and FDA recommended an immediate pause in the distribution of the single dose vaccine offered by Dow member Johnson & Johnson following reports of rare blood clots. The announcement comes as some states within the U.S. struggle with increased infections of COVID-19 despite gradual improvement in vaccination trends. Meanwhile, small business optimism improved above its long-term average for the first time since November 2020. Some caution also appeared to keep conviction in check with the unofficial start to Q1 earnings season set to shove off tomorrow. Treasuries are higher, putting pressure on yields, and the U.S. dollar added to a recent decline, while gold and crude oil prices were higher. In other equity news, industrials company Fastenal Company released Q1 earnings in-line with forecasts. Markets in both Europe and Asia were also mixed.

The Dow Jones Industrial Average fell 68 points (0.2%) to 33,677, the S&P 500 Index increased 14 points (0.3%) to 4,142, and the Nasdaq Composite was up 146 points (1.1%) at 13,996. In moderate volume, 796 million shares were traded on the NYSE and 4.1 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.48 to $60.18 per barrel. Elsewhere, the Bloomberg gold spot price was $12.13 higher at $1,744.89 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.3% to 92.16.

CPI picks up, small business optimism rises…..

The Consumer Price Index (CPI) rose 0.6% month-over-month (m/m) in March, above the Bloomberg consensus estimate of 0.5%, and compared to February’s unrevised 0.4% gain. The core rate, which strips out food and energy, was up 0.3% m/m, versus expectations of a 0.2% rise and February’s unadjusted increase of 0.1%. Year-over-year (y/y), prices were 2.6% higher for the headline rate, above forecasts and above February’s unadjusted 1.7% rise. The core rate was 1.6% higher y/y, above projections.

The National Federation of Independent Business (NFIB) Small Business Optimism Index for March improved to 98.2 from February’s 95.8 level, but slightly below the Bloomberg estimate of an increase to 98.5. The index rebounded above the 47-year average of 98 for the first time since November 2020, as owners expecting better business conditions over the next six months increased but continued to be a net negative.

Seven of the ten index components improved and three declined, with earnings trends and capital spending activity both improving with the former remaining at a net negative reading. On the jobs front, the report showed 42% of owners reported job openings that could not be filled in March, a record reading. The NFIB said, ” A net 28% of owners reported raising compensation (up three points) and the highest level in the past 12 months. A net 17% plan to raise compensation in the next three months, down two points.”

Treasuries were higher, as the yield on the 2-year note lost 1 basis point 0.16%, while the yield on 10-year note fell 4 bps to 1.62% and the 30-year bond rate was down 3 bps at 2.31%.

©2021 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.