US equities rose throughout today's trading despite poor
economic data. March personal income rose 0.2% vs. expectations of
0.4% and personal spending rose 0.2% vs. expectations of 0.0%.
Spending expectations had anticipated a greater drop due to higher
fuel costs. Spending on services reached a multi-decade high. The
savings rate remains near historical lows at 2.7% this past month
and at 2.6% this year as taxes have accounted for a major jump in
costs. Annual income figures only rose 2.5% at the slowest rate
since the last recession.
Pending home sales showed a 1.5% monthly gain, above the 1%
expectations. Yearly pending home sales grew 5.8% vs 6.1%
expectations. The Dallas regional manufacturing survey dropped to
-15.6 from 7.4 the past month, which was well below the 5.0
estimate. The downturn was led by sharp drops in production, new
orders, and order growth.However , the employment subindex did show
a monthly gain. We are not too concerned about this miss as the
national ISM manufacturing index released on Wednesday and the
Chicago regional survey set to be released tomorrow are more
reflective of economic conditions.
European equities rose with the prospect of a finalized Italian
government. The Italian FTSE MIB was the top performing major
European index for the day, up 2.2%.
In individual stock news,
) got a boost on chatter of 5%-10% passive stakes from two major
) announced a $3.6 billion secondary equity offering to raise
capital ratios to the new Basel III mandated level of 9.5%.
Tomorrow's Financial Outlook
Tomorrow, the pace of rampant economic data releases will continue.
Set to be released are the Chicago regional manufacturing PMI
survey, the consumer confidence survey from the Conference Board,
and the Case-Shiller home price indexes. Notably, the Chicago PMI
is expected to expand to 53 from 52.4 in March, consumer confidence
is expected to move to 60 from 59.7 in March, and home prices are
expected to show an annualized gain of 8.9%.
Globally, Japan will release housing starts, the eurozone will
release employment figures, and Canada will release GDP. In the
eurozone, unemployment is expected to increase to 12.1% in March
from 12.0% the month prior, while German unemployment for April is
forecast to remain unchanged at 6.9%. Canadian GDP is expected to
grow 1.3% year-over-year for February, up from 1.0% the month
Earnings reports will be a bit slower tomorrow, but they remain
robust for the week. Notable reports tomorrow include
Archer Daniels Midland