Particularly after Friday's fireworks, markets needed some time
to digest the new jobs data and the burst through the upper band of
technical resistance. Japanese markets remained closed, and markets
in the UK were also closed, leading to a thin trading day for
The key takeaway from today was that it was the second day of
sector rotation. This year, the utilities, consumer staples, and
health care sectors have been leading the stock market due to their
higher dividend yield. Over the past two days, this has changed.
The utilities sector fell 1.19% today, consumer staples were down
0.71%, and health care was down 0.46%, with the S&P 500 up a
few points. Leading sectors for the day were financials (up 1.07%)
and energy (up 0.61%).
Treasuries continued their sell-off today with the 10-year yield
falling 3 basis points to 1.7675%. The Treasury will auction $24
billion of 10-year notes on Wednesday and $16 billion of 30-year
bonds on Thursday.
) has settled its lawsuit with
Bank of America
); this ongoing suit has lasted well over two years. The suit dealt
with faulty mortgages issued throughout 2005 and 2007. MBIA and
Bank of America settled the deal in exchange for $1.6 billion in
cash and a $500 million line of credit to MBIA for a dismissal of
the mortgage claims. Bank of America will also receive warrants for
a 5% stake in MBIA as part of the deal. MBIA's stake was up 45%
during the day and Bank of America was up almost 5%, inline with
most of the other money center banks.
Tomorrow's Financial Outlook
Tomorrow will be the busiest day of the week for economic data and
earnings. In the morning, the IBD/TIPP economic optimism survey
will be released. Analysts are expecting the survey to show a bit
more confidence at a reading of 47.0, up from 46.2 the month prior.
In the afternoon, March consumer credit will be released. Estimates
call for a $16 billion rise in March, down from an $18.139 billion
increase in February. In the prior report, much of the real
increase came from federal government-backed credit and
non-revolving financial credit.
Globally, Japanese markets will be open for the first day since
last Thursday, and we will see their reaction to the
better-than-expected jobs data from Friday. Additionally, London
markets will be open after being closed today. The Reserve Bank of
Australia will release its monthly monetary policy decision. In
March, the Australian unemployment rate rose to 5.6% from 5.4% so
the central bank will be under more pressure to continue lowering
its main policy rate from the record low rate of 3%. Over 75% of
economists expect the central bank to keep its policy on hold.
The last bit of earnings will be tomorrow with 43 companies
reporting in the US. Over 80% of S&P 500 companies have already
reported and 73% have beat earnings. Out of that 73%, the average
surprise rate over estimates is 5.38%. Notable reports tomorrow
Whole Foods Markets