Daily markets: Investors wait for FOMC minutes amid stronger-than-expected economic data
The big picture of today
After yesterday’s decline in US markets, the main Asia-Pacific stock indexes were now mixed. The winners were the Australian ASX 200, gaining 0.6%, the South Korean Kospi adding 0.3% and the Japanese Nikkei 225, increasing 0.1%. The declines were Hong Kong’s Hang Seng, down 0.9%, and Shenzhen in China, which lost 0.7%. At midday in Europe, major stock indexes were mixed and US equity futures were relatively stable.
Yesterday’s robust employment data in the JOLTS report, in addition to last Friday’s better-than-expected employment report, combined with the latest ISM data on the manufacturing and services sector, is likely pushing investors to rethinking the likelihood that the Biden administration will be able to push through the entire stimulus package as currently presented. The main focus of the day, however, will be the report from the latest meeting of the Federal Reserve’s Open Market Committee, which will offer clues as to when rate hikes can be expected.
More importantly, what’s up with ketchup? Folks, the ketchup shortage is fast becoming a national emergency. And after? Ranch dressing?
President Biden calls on US states to make vaccine appointments accessible to all adults by Monday, April 19; most have already done so. Just over a year after the first restrictions were implemented in the country’s most populous state, California Governor Gavin Newsom plans to reopen completely its state on June 15 if hospitalizations remain stable, but masks will still be needed. Texas is already allowing businesses to operate at 100% capacity and has rescinded its mask mandate.
Today brings the latest worldwide service PMIs for March, which were overall stronger than expected with a few exceptions:
- Australia hit 55.5, down from 53.4.
- Spain’s rose more than expected to 48.1 (still contracting) from 43.1 from which it should drop to just 46.8.
- Italy unexpectedly fell to 48.6 from 48.8 compared to expectations of an increase to 49.1.
- France rose more than expected to 48.2 from 45.6, from which it is expected to rise to 47.8.
- Germany’s rose more than expected to 51.1 (expansionist) from 45.7, from which it is expected to drop to just 50.8.
- Overall, the Eurozone came out stronger than expected at 49.6 (still contracting) from 45.7, from where it should recover to 48.8.
- The UK rose slightly less than expected to 56.3 from 49.5, from which it is expected to rise to 56.8.
India’s central bank, the Reserve Bank of India (RBI), kept its benchmark repurchase interest rate at 4% at its April meeting, as scheduled, and plans to maintain an accommodative stance for as long as necessary. to support growth on a sustainable basis, mitigate the impact of Covid-19 on the economy while keeping inflation within its target range.
Yesterday, the International Monetary Fund raised its growth outlook for 2021 for the global economy to 6% from 5.5% in January.
Yesterday’s Bureau of Labor Statistics JOLTS report for February found that job postings hit a Absolute 2-year high and as a percentage of the total workforce, they hit an all-time high with a lower workforce than it was before Covid with the total number of job postings less than 171,000 off the record of November 2018. Total private hires as a percentage of the labor force were in the 91st percentile of all time in February, with vacancies in the 100th percentile and layoffs in the 2nd percentile.
On an industry basis, two fields with the highest level of hiring were manufacturing (97th percentile) and recreation and hospitality (98th percentile). The lowest were mining and logging (10th percentile) and government (27th percentile). The fields with the highest level of job vacancies as a percentage of the labor force were manufacturing (99th percentile), education and health services (100th percentile), and professional and business services (98th percentile).
Yesterday’s IBD / TIPP Economic Optimism Index for April rose 1.8% to 56.4, a new high since February 2020 with a 6-month outlook up 5.1%, but the under -Personal finance index, which measures how people think about their own finances over the next six months, fell 1.2% to 57.3.
According to the Mortgage Bankers Association, with mortgage rates rising again last week, the overall volume of mortgage applications fell 5.1% WoW. Mortgage refinancing requests fell 5% and 20% year-on-year, the slowest pace since last June and the fifth consecutive decline in refinancing activity.
The vacancy rate for US shopping centers hit a record high of 11.4% in the first quarter of 2021, down from 10.5% in the fourth quarter, according to Moody’s Analytics, which tracks about 700 of the nation’s estimated 1,000 malls. UBS Group (UBS) this week released a report that estimates the closure of approximately 80,000 retail stores in the United States over the next five years.
Later today we’ll have February’s trade balance, the EIA’s usual weekly energy stocks, but more importantly, the minutes from the last FOMC meeting will be released this afternoon at 2 p.m. EST.
Yesterday, the S&P 500 hit a new intraday high but closed 0.1% lower, as did the Nasdaq Composite, while the Dow and Russell 2000 lost 0.3%. The US dollar fell 0.2%, while WTI crude gained 1.3% and gold rose 0.9%. The 10-year Treasury yield edged down to 1.66%.
Actions to watch
Yesterday SMART Global Holdings (SGH) posted quarterly earnings which posted EPS of $ 0.87, beating expectations by $ 0.80 and up from $ 0.52 last year. Revenue of $ 304.01 million was also 2.7% higher than expected and up from $ 270.04 million last year.
This morning MSC Industrial (MSM) shares fell 4.0% in pre-market trading after the company reported fiscal second-quarter (adjusted) EPS of $ 1.03, up slightly from expectations of $ 1.02, which were the same level as last year. Net sales were $ 774 million, down from $ 786.1 million last year and below the expected $ 778.1 million.
RMP International (RPM) reported a beat of $ 0.08 over non-GAAP EPS, which was $ 0.38, and a shortfall of $ 0.09 over GAAP EPS, which was $ 0.29 . Revenue increased 8.5% year-on-year to $ 1.27 billion, beating expectations of $ 60 million. Adjusted EBIT was slightly weaker than expected at $ 79.9 million against a consensus of $ 60.5 million.
Coinbase, which will start trading on the Nasdaq next week under the ticker PIECE OF MONEY, said it expects to report revenue of $ 1.8 billion for its first quarter, a nearly ten-fold increase year-over-year. Net profit is expected to be between $ 730 million and $ 800 million, from $ 32 million in the first quarter of 2019. The number of verified users rose to 56 million in the first quarter from 43 million in 2020, while the number of verified users rose to 56 million in the first quarter from 43 million in 2020. number of transactions on a monthly basis during the quarter rose to 6.1 million, more than double the 2.8 million in the first quarter of 2020.
Later this morning Lamb Weston (LW) will report, and after today’s market close, Connection to resources (RGP) is expected to publish its latest quarterly results. Investors looking to get the details of these and other reports slated for release this week should visit Nasdaq earnings calendar page.
On the horizon
- April 8: Weekly unemployment claims
- April 9: PPI, Inventories of wholesalers
- April 12: Monthly budget statement for March
- April 13: Inflation, API Crude Oil Inventory Report
- April 14: Import / Export Prices, EIA Energy Stock Reports
- April 15: Retail Sales, NY Empire State Manufacturing, Philadelphia Fed Manufacturing, Weekly Unemployment Claims, Industrial Production, Business Inventories, NAHB Housing Market Index, Net Equity and ICT Flows, Foreign Bond Investment
- April 16: Housing starts, building permits, Michigan consumer sentiment
Thought of the day
“Spring is here, and I’m so excited I got my plants wet.” Anonymous and fantastic
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.