Utility stocks made a comebackon Thursday after Warren Buffett's
(NYSE:BRK.A) announced the $5.6 billion acquisition of Nevada-based
The sector has come under serious pressure as of late, having
recorded five straight down days in a row prior to today's bounce.
Outside of utilities, today's strength was fairly broad-based,
with notable outperformance in the
(INDEXRUSSELL:RUT) small cap index. In fixed income, junk bonds
rebounded from their recent slump, which was largely driven by
fears of the Fed pulling back out of the economy.
Additionally, while many traders have been fearing that rising
Japanese market volatility could bleed into the US, we didn't see
that at all today as traders were not disturbed by a 5% decline in
Japanese stocks yesterday. In fact, futures on Japan's
(INDEXNIKKEI:NI225) rose 1.3% today.
In company news, shares of
(NASDAQ;PCLN) rose more than 2% following yesterday's announcement
of a $1 billion expansion in its share repurchase program, which
will be funded by a convertible bond issue.
) also popped after boosting its own buyback program and initiating
a quarterly dividend.
) generated interest today after the company announced a massive
expansion of its Supercharger network of charging stations, which
will soon enable coast-to-coast driving in its electric
On the economic front, we saw a host of data today.
Initial jobless claims were slightly worse than expected at 354K,
while Continuing Claims came in at 2986K, above the 2966K
consensus. First-quarter GDP growth (second estimate) was 2.4%,
which was a hair below the 2.5% consensus.
The market also received energy inventory reports today, which
sent oil higher and natural gas sharply lower.
We have some important economic data on taptomorrow , starting
at8:30 a.m. EDT when April Personal Income, Personal Spending, and
PCE Prices are released. Then at9:45 a.m. , May Chicago PMI and
University of Michigan Consumer Sentiment will be released.
Given that in this year's rally, the market has not seemed to
necessarily correlate to economic fundamentals, it is tough to
gauge the potential reactions to these numbers. However, we would
watch for a potential spike in US Treasuries on bad data as they
have been down significantly as of late on fears of Fed tapering
its QE activities and are perhaps oversold.