US equity futures were lower overnight on weaker Chinese and
German manufacturing data, but they steadily rallied back during
the day despite weak economic data in the US. Ever since
) found a bottom yesterday morning after reporting
less-than-stellar earnings, the broader S&P 500 has rallied
back 29 points or close to 2%. The S&P 500 gained 15 points out
of the gate and more or less held that area throughout the day.
During the early afternoon, the official Twitter account for the
Associated Press was hacked and false reports of explosions at the
White House sent the S&P 500 to unchanged on the day for a few
minutes before rallying back to its prior level.
The three economic reports in the US showed manufacturing data
continuing to weaken while new home sales continued their modest
uptrend. Markit preliminary US PMI fell to 52.0 from last month's
54.6, well below the 53.9 consensus. The drop was due to
significant drops in new orders, employment, and output. Similarly,
the Richmond regional manufacturing index dropped to -6 from 3 the
month prior on drops in new orders, employment, and capacity
utilization. March new home sales rose 1.5% month-over-month to an
annualized rate of 417,000, up from 411,000 in February.
Global economic data was not great. The eurozone composite PMI was
unchanged month-to-month at a reading of 46.5, but more worrisome
was the significant drop in German manufacturing PMI to 47.9 from
February's 49. Similarly, Chinese flash manufacturing PMI fell to
50.5 in April from 51.6 the month prior. The Chinese Shanghai
Composite Index fell 2.57% in overnight trading.
After the close,
) reported earnings. For the EPS and revenue numbers, both beat,
but forward revenue guidance for the 2Q left much to be desired.
However, the company increased its buyback plan by $50 billion to
$60 billion, leaving $59 billion yet unpurchased, and increased its
dividend by 15%. To fund such a large buyback and dividend plan,
the company will issue debt. Apple received a AA+ reading from
Tomorrow's Financial Outlook
Tomorrow is an equally busy day in terms of both economic data and
earnings reports. In the morning, we have March durable goods
orders and capital goods orders. Durable goods orders will show a
large headline number due to a decline in
) aircraft shipments, but the more important ex transports number
is expected to show a 0.6% gain. Given the fact that manufacturing
surveys for March were generally weaker, we would expect this
number to miss to the downside.
On the US earnings front, it will again be a busy day with more
than 20 companies reporting. Notable reports include
On the calendar for global economic data is Australian consumer
inflation and German economic expectations via the IFO Institute.
Australian consumer inflation is expected to increase annually to
2.4% from 2.3%.