U.S. Equities Get Back on Track, Snapping Two-Day Slump…..

U.S. stocks closed higher snapping a two-day losing streak that came on the heels of a rally to record-high levels. General optimism of robust 2021 economic and earnings growth appeared to be the catalyst, as recent pressures caused by simmering concerns about the uptick in COVID-19 cases in pockets around the world took a back-seat. Nearly all sectors ended in the green, but Utilities and Communication Services issues lagged, as the latter saw some disappointing subscriber results from Netflix and Dow member Verizon Communications. Meanwhile, Energy and Materials were the day’s standouts. Q1 earnings season continued to roll on, as CSX Corporation was the first major rail company to report results and missed earnings forecasts but offered stronger-than-expected revenue guidance. Treasuries were little changed, and the U.S. dollar nudged lower. Gold rose and crude oil prices added to yesterday’s decline. The U.S. economic calendar remained light, but showed a rebound in mortgage applications, which broke a six-week string of declines, aided by the cooling off of interest rates as of late. In North American economic news, the Bank of Canada decided to taper its asset purchases after raising its economic growth and inflation projections. Asia finished mostly lower, but Europe closed mostly higher as the region looked ahead to tomorrow’s monetary policy decision from the European Central Bank.

The Dow Jones Industrial Average rose 316 points (0.9%) to 34,137, the S&P 500 Index increased 38 points (0.9%) to 4,173, and the Nasdaq Composite was up 164 points (1.2%) at 13,950. In moderate volume, 826 million shares were traded on the NYSE and 3.9 billion shares changed hands on the Nasdaq. WTI crude oil lost $1.32 to $61.35 per barrel. Elsewhere, the Bloomberg gold spot price was $15.64 higher at $1,794.39 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—slipped 0.1% to 91.12.

Mortgage applications rise, Treasury yields higher and the U.S. dollar nudges lower…..

The MBA Mortgage Application Index rose 8.6% last week, following the prior week’s 3.7% decrease. The increase came as a 10.4% jump in the Refinance Index was met with a 5.7% rise for the Purchase Index. The average 30-year mortgage rate fell 7 basis points (bps) to 3.20%.

Treasuries were little changed, with the yields on the 2-year note and 30-year bond flat at 0.15% and 2.25% respectively, while the yield on the 10-year note decreased 1 to 1.55%.

Bond yields have cooled a bit following the swift yield curve steepening in Q1 and the U.S. dollar has given back a large portion of last quarter’s rise even as economic data has been strong to preserve expectations of robust 2021 growth, and inflation has warmed up.

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