Stocks Little Changed Ahead of Tomorrow’s Tech Earnings…..
U.S. equities closed mixed but little changed, as investors began to look ahead to tomorrow’s action packed agenda which is set to include earnings reports from several prominent tech companies as well as the FOMC decision later in the afternoon. Similar to tomorrow’s packed schedule, today also brought about numerous reports for investors to sift through, beginning with earnings results, as Dow member 3M Company’s upbeat results were overshadowed by supply chain disruptions and United Parcel Service rallied after posting upbeat figures, while reports from General Electric and Tesla were mixed. On the economic front, Consumer Confidence jumped to a level not seen since early 2020 and housing prices notched a sizable increase, while regional manufacturing continued to show expansion, albeit falling short of expectations. Persistent concerns surrounding rising COVID-19 cases in parts of the world continued to stymie sentiment, and also added to the cautious trading. Treasuries saw pressure, as yields rose, and the U.S. dollar ticked higher, while gold was lower in choppy trading and crude oil prices rose. Asia finished mixed amid continued virus anxiety and after the Bank of Japan lowered its inflation forecasts, while markets in Europe were mixed despite upbeat earnings in the region.
The Dow Jones Industrial Average rose 3 points to 33,985, the S&P 500 Index decreased 1 point to 4,187, and the Nasdaq Composite declined 49 points (0.3%) at 14,090. In heavy volume, 778 million shares were traded on the NYSE and 4.6 billion shares changed hands on the Nasdaq. WTI crude oil gained $1.03 to $62.94 per barrel. Elsewhere, the Bloomberg gold spot price was $4.72 lower at $1,776.68 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.1% to 90.89.
Consumer confidence jumps, regional manufacturing remains steady, housing prices rise…..
The Conference Board’s Consumer Confidence Index rose to 121.7 in April from March’s downwardly revised 109.0 level, and versus the Bloomberg consensus estimate calling for a gain to 113.0. The index hit the highest level since February 2020’s 132.6 reading, as the Present Situation Index jumped to 139.6, a 1-year high, and the Expectations Index of business conditions for the next six months ticked higher to 109.8. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—moved further into positive territory, posting a reading of 24.7 following the 8.0 level registered in March.
The Richmond Fed Manufacturing Activity Index stayed solidly in expansion territory (a reading above zero) for this month. The index remained at March’s reading of 17 for this month versus forecasts of a rise to 22.0. Growth in new orders and backlogs was met with decline in shipments and inventories.
The 20-city composite S&P CoreLogic Case-Shiller Home Price Index showed an 11.94% year-over-year (y/y) gain in home prices in February, versus the Bloomberg consensus estimate of an 11.80% increase. Compared to the prior month, home prices were up 1.17% on a seasonally adjusted basis, above forecasts for a 1.00% gain.
Finally, the Federal Open Market Committee (FOMC) is set to begin its two-day monetary policy meeting today, which will conclude with tomorrow’s statement, as well as the customary press conference from Fed Chairman Jerome Powell. Powell’s comments are likely to be highly scrutinized given the backdrop of optimism of rising inflation expectations, as well as the recent steepening of the Treasury yield curve. No updated economic projections from the Committee will be released.
Treasuries were lower, as the yield on the 2-year note was up 1 basis point to 0.18%, while the yields on the 10-year note and the 30-year bond advanced 6 bps to 1.62% and 2.30%, respectively.
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