The Asian markets were mixed, HK +1.44%, Shanghai -0.74% and Japan +0.30%. Something new. Japanese are notorious for buying U S treasuries. Recently they stopped hedging the dollar betting the Yen will drop more.
European markets were strong, Euro STOXX +1.44% and DAX +1.55%. The U S market action encouraged buying. The PMI's were good. The Manufacturing slipped to 45.6, but the Services was 52.9 and the Composite rose to 51.4.
In the U S,March New Home Sales were well above expectations with convoluted data. The report was +8.8%, while last month was revised sharply down to -5.5%?
The preliminary PMI was Manufacturing 49.9 from 51.9. Services was 50.9 from 51.7.
Richmond Fed Index was -7 from -11.
The PMi analyst had some negative comments about new orders and more layoffs.
He suggested that the economy was loosing momentum. He has been positive.
Meanwhile the pricing jumped higher.
The recent data has flipped into one of its reversals. Tough to tell what it means yet.
S&P 500 +59.95, +1.20%. to 5,070.55.
The market opened at 5,029 and rallied to 5.069 by 11 am. A very slow churn reached 5,074 by 2:30 pm. A tilt downward made a close of 5,070.
There were more positives today. There was follow through buying. There were more fundamental buyers today. The single day options traders tried to get together and force the market down. They got run in and had to sell which generates buying in the market.
See below.
The PMI data along with a solid 2 yr T bond auction caused the 10 yr T bond rate to slip below 4.6% This helped psychology.
The trading desks say long only funds are still selling, but hedge funds are buying because the buybacks are resuming on a higher scale next week.
The suddenness and sharpness of the decline has created some oversold readings like last October.. It also generated a lot of traders jumping into short positions.
The DJIA rose 0.69%. The NASDAQ increased 1.59% and the QQQ 1.49%. The IWM was plus 1.79%
WTI had a wild day. It slid to 80 and then had a good rebound to 83.36. +$1.43. There was little new information on oil. The XOP was +0.7% and the XLE +0.55%.
The 10 yr T bond rate regained some of its early decline to close down only 2.1 bps at 4.603%.. The KBWB was up again, 1.0%. The XLU was 0.5% higher.
The VIX dropped 7.4% to 15.69. This is potentially a positive sign. The advances were up nicely, the NYSE 4.8 to 1 and the NASDAQ 2.9 to 1. The NYSE volume was below average and the NASDAQ average.
After the close TSLA reported very poor earnings as expected. It rose 10% at one point. There are so many shorts they want out when the stock doesn't go down on the bad news.
I suspect a number of stocks have enough shorts and stocks that have fallen sharply that there will be rallies on companies just meeting expectations.
The companies with the best earnings expectations are META , MSFT and GOOG. They report over the next two days. This could give more energy to the market??
blub, blub
Jerry