Overnight economic data out of Europe showed European growth
slowing more than was expected. Eurozone GDP fell 0.2% in the first
quarter, up from a -0.6% decline in the fourth quarter of 2012, but
worse than the -0.1% estimate. Growth in France returned to a
quarterly contraction, falling to a 0.2% contraction.
In US economic data this morning, the New York regional
manufacturing survey fell to a reading of 1.43, lower than the 4.00
estimate and down from 3.05 last month. Annual producer prices rose
0.6%, which was below the 0.8% estimate and down from 1.1% the
month prior. Recently, manufacturers have expressed optimism that
the falling prices may be a reason to increase production and
restock low inventories. Net asset flows in the US rose $2.1
billion in March. The two largest holders of US Treasuries, Japan
and China, were net sellers of $1.9 billion. Lastly, the NAHB
Housing Market Index of homebuilders and real estate agent
confidence turned up after falling the last three months. The index
rose to 44 from 41 last month after falling from a peak of 47. Last
year the index saw a reading of 28 and peaked at 72 in 2005.
US equities dipped into the red in very early trading, but shot up
in the late morning and ended in positive territory. The defensive
utilities, telecom, and consumer staples were the leading sectors,
though, and they were all up more than 0.75%. Treasuries, however,
stopped the flush that has been occurring since April's nonfarm
payrolls report, and the 10-year yield was down 4 basis points to
The dollar was generally higher as the euro struggled and finished
at 1.2882, down 38 pips vs the dollar. Commodities were generally
weaker, coinciding with the higher dollar. Although oil was down as
much as $1 on a weaker oil inventories report, it ignited near noon
to close near unchanged.
) filed to sell 2.7 million shares (about $229.5 million at today's
closing price) and $450 million in convertible debt to pay down
existing debt. Additionally, CEO Elon Musk will acquire $100
million of the new equity shares, which provides a positive backing
for the deal. Tesla's stock has risen 150.49% this year, and it has
recently gone parabolic as consumer reviews for the company's
electric cars have turned more favorable.
Tomorrow's Financial Outlook
Tomorrow will be another robust day for economic data in the US.
Consumer inflation prices will be released in the morning along
with housing starts and building permits. Consumer price inflation
is expected to decline to an annual rate of 1.4%, down from 1.5%
the month prior. Housing starts are expected to decline to an
annual rate of 980,000 in April, down from 1.036 million the month
prior. Building permits are expected to increase to 941,000 from
907,000 on increased housing activity. The Philadelphia regional
manufacturing survey will also be released. Philadelphia's region
is one of the more significant surveys and is expected to continue
to remain expansionary at a reading of 2.8, up from 1.3 in April.
Global economic data will be lighter with Japan releasing
industrial production data and the eurozone releasing consumer
price inflation data. Eurozone inflation is expected to remain
unchanged from the initial 1.2% annualized reading, and core
inflation is also expected to remain unchanged at 1.0%.
Tomorrow's earnings will include