US investors today continued to digest yesterday's comments from
Fed Chair Janet Yellen. Inflation-sensitive assets all rallied
strongly after Yellen brushed off the recent, higher readings as
"noise." Gold rose 3.5% in today's trading, with silver rising a
similar amount. Small-cap stocks were outperforming their large-cap
brethren in early trading, but that trend reversed by the end of
the session. Utilities stocks continued to be surprisingly strong
after breaking above their highs from April. The major US indices
finished the day around flat after becoming technically overbought.
US Treasuries rallied early in the session, with the curve
steepening significantly as investors priced in higher inflation,
only to experience a sharp selloff later in the day. The $7 billion
auction of 30-year Treasury Inflation Protected Securities (
) received strong demand, but at yields above what most
participants had expected. The 30-year Treasury was the worst
performer, its yield rising as much as 7.5bps.
) shares rose 9.7% to $9.09 after the company reported
better-than-expected fourth-quarter revenues and earnings.
Smartphone units improved over last quarter, and cash flow is
expected to be at breakeven by the end of the current fiscal year.
Tomorrow is "quadruple witching day," when monthly single-stock
options, index futures, index futures options, and stock futures
all expire. Accordingly, volume will be much higher than normal;
expect indices to gravitate around round numbers, as they tend to
do. There are no major economic reports scheduled.
Eurozone consumer confidence for June will be reported tomorrow
morning. Recent surveys of professional investors have had high
levels of confidence in the current economic situation in Europe.
Also, Canada will release its May consumer price index and retail
) are the only two earnings reports scheduled for tomorrow.