Thursday's Market Recap - Bulls Retreat After President Scheduled Press Conference On China For
What is The Premarket Telling Us?
7:00 AM.
After two days of sharp gains, the futures are mixed at this hour. Dow futures are up 124 points, Nasdaq futures down 42 points, and the S&P futures up 3 points. Asian markets ended mixed.
On The Bond Desk:
The US 10 Year Bond Yield at 0.65%, down 0.05%.
Currency Desk:
Euro dollar: 1.10
UK Pound: 1.22
Crude Oil:
WTI crude oil futures at $32.61/barrel, down 0.61%.
On the Earnings Calendar:
Discount retailers, Dollar General, and Dollar Tree reported better than expected quarterly performance, confirming they both benefited from the pandemic lockdown.
Burlington on the other hand, reported a wider than expected loss, and a decline in revenue.
In M&A News:
None.
What About The Asian And European Markets?
Major Asian markets close mixed. Japan (Nikkei 225) gained 2.32%, Shanghai up 0.33%, Hong Kong (Hang Seng) fell 0.72% as demonstrations in Hong Kong continues.
Major European markets ended higher. German (DAX) up 1.04%, France CAC 40 up 1.76%, London FTSE 100 up 1.21%.
Market And Sector Dynamics
Markets opened triple digits higher, the Dow surging 178 points, Nasdaq down 10 points, and the S&P up 10 points. Utilities and healthcare led the session early in the session. This week's Initial Jobless Claims report showed new unemployment claims surged another 2.13 million claims, which was in line with expectation. Also, the preliminary read on 1st Quarter GDP came in at minus 5% vs minus 4.8% expected, and the markets was comfortable with.
Better than expected 1st Quarter results from discount retailers, Dollar General, and Dollar Tree was a positive catalyst for markets today. Both companies beat earnings and revenue expectations, confirming that they benefited immensely from the stay at home pandemic lock down.
Comments from Bank of America's CEO, Brian Moynihan, looking on a macro level, suggest that their is a lot of stimulus money left in American bank accounts, to support consumer spending in the economy.
The market remained elevated for the entire session until shortly after 3:00 PM when news broke that the President would hold a press conference tomorrow, regarding China. The markets went south from there.
Trading today was fairly balance. Six of the S&P eleven sectors ended lower, led by Energy, Financials, Consumer Discretionary, Industrials, and Communication Services. Utilities, Healthcare, Real Estate, Basic Materials, and Consumer Staples closed higher in the session.
Factors Influencing Today's Market
Optimism about reopening, and growing confidence that consumer spending was looking better than assumed.
Preliminary read on first quarter GDP was down minus 5% vs minus 4.8%.
This week's Initial Jobless Claims showed 2.13 million unemployment claims.
US 10 Year Bond closed the day at 0.697%, up 0.24%.
WTI crude oil futures closed at 33.71/barrel, up 2.74%.
This week's EIA Petroleum Status Report shows US crude oil inventory grew/build by 7.9 million barrels.
Market Close Volume Traded And Advance Decline Ratio
Markets sold off in the last half hour of trading, after the President announced a press conference about China, scheduled for tomorrow. The Dow sank 147.63 points, Nasdaq lost 43.37 points, and the S&P fell 6.40 points. Total NYSE volume traded, a moderate 5.41 billion shares. Declining shares outpaced Advancing shares by 1.40:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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