Stocks Close Lower, Wrapping Up a Busy Week of Data…..

U.S. equities closed lower on the day and mostly lower for the week as markets wrestled with a week full of high-profile earnings and economic reports. Most sectors were lower as stocks within the Energy sector bore the brunt of today’s downdraft, while issues in the Real Estate and Consumer Discretionary sectors offered some of the few bright spots. The earnings calendar remained a major focus, as trounced estimates and Chevron swung a profit, while investors appeared unimpressed with Twitter’s earnings results and guidance. In economic news, March personal income soared with the aid of recent stimulus checks, while Q1 employment costs rose, consumer sentiment was revised higher, and manufacturing activity in the Chicago region jumped to its highest level in over 37 years. Treasuries were higher with rates modestly coming down and the U.S. dollar was sharply higher, while gold and crude oil prices fell. Overseas, Asia finished out the week lower following some disappointing Chinese data, while stocks in Europe lost steam late in the day to finish mostly lower amid a number of reports on the economic and earnings fronts.

The Dow Jones Industrial Average fell 186 points (0.5%) to 33,875, the S&P 500 Index decreased 30 points (0.7%) to 4,181, and the Nasdaq Composite declined 120 points (0.9%) to 13,963. In heavy volume, 1.2 billion shares were traded on the NYSE and 4.7 billion shares changed hands on the Nasdaq. WTI crude oil lost $1.43 to $63.58 per barrel. Elsewhere, the Bloomberg gold spot price was $4.20 lower at $1,767.97 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.8% to 91.30. Markets were mostly lower for the week, as the DJIA moved 0.5% to the downside, the S&P 500 was little changed, and the Nasdaq Composite declined 0.4%.

Personal income jumps, consumer sentiment revised higher, regional manufacturing soars…..

Personal income jumped 21.1% month-over-month (m/m) in March, versus the Bloomberg forecast of a 20.1% increase, and following February’s upwardly revised 7.0% shortfall. Personal spending rose 4.2%, versus estimates of a 4.1% rise and compared to the prior month’s unadjusted 1.0% decline. The March savings rate as a percentage of disposable income was 27.6%.

The PCE Deflator increased 0.5% m/m, matching expectations, and compared to February’s unadjusted 0.2% gain. Compared to last year, the deflator was 2.3% higher, in line with estimates and above February’s downwardly adjusted 1.5% advance. Excluding food and energy, the PCE Core Index moved 0.4% higher m/m, above expectations for a 0.3% gain and north of February’s unrevised 0.1% increase. The index was 1.8% higher y/y, matching estimates and compared to February’s unadjusted 1.4% increase.

The final University of Michigan Consumer Sentiment Index for April was revised higher than expected to 88.3, versus expectations to be adjusted slightly upward to 87.5 from the preliminary reading of 86.5. The upward revision came as the expectations component of the survey was revised favorably and the current conditions component remained at its preliminary level, while both were solidly higher m/m. The overall index was up versus March’s 84.9 level and posted the strongest figure since March 2020. The 1-year inflation forecast dipped to 3.4% from March’s 3.7% rate, and the 5-10 year inflation forecast remained at the prior month’s 2.7% forecast.

Finally, the Chicago PMI accelerated more than expected to move further into expansion territory (a reading above 50) for April. The index jumped to 72.1 from March’s 66.3 level—the highest level since December 1983—versus estimates calling for a decline to 65.0. The higher-than-expected expansion for the index came as new orders, prices paid, production and employment grew at faster paces, while inventories reversed direction, signaling contraction.

The Q1 Employment Cost Index increased 0.9% quarter-over-quarter (q/q), exceeding estimates calling for it to match Q4’s unadjusted 0.7% rise.

Treasuries were higher, with the yields on the 2-year note and 30-year bond both flat at 0.16% and 2.30%, respectively, while the yield on the 10-year note declined 1 basis point to 1.63%.

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