The bullish overseas and emerging market rallies occurring just recently has shifted quickly and sharply back to U.S. and European markets.
At its core, the rally in developed markets is based primarily on faith in Janet Yellen’s clarified and renewed comments that interest rates would remain low for an extended period. There is also faith by investors that spring will bring improved economic data while early earnings news is well-received.
As a consequence some selling is taking place overseas with proceeds finding their way back primarily to U.S. markets. Earnings news from Netflix (NFLX), Home Depot (HD), Harley-Davidson (HOG) and United Technologies (UTX) beat expectations on top and bottom lines. Meanwhile, and not unusual in this “go-go” environment, companies with poorer results like McDonalds (MCD) are ignored.
Economic data included FHFA Home Price Index rose to 0.6% vs prior 0.3%; Existing Home Sales were unremarkable at 4.59M vs 4.60M; and, Richmond Fed Index rose substantially to 7 vs prior -7.
In fact as spring offers better weather it wouldn’t surprise that Existing Home Sales might increase given pent-up demand, newly loosened mortgage standards and low mortgage rates.
There’s always some bad news under the carpet as it’s being reported by the WSJ that Student Loan forgiveness is growing at 40% and has surged to $72 billion. The article also asserts that easy Student Loan policies are driving up college costs. Another story under the headlines is 600 U.S. troops are heading to Europe to stage training exercises to theoretically counter Russian moves. But, alas, these worries are for another day.
Leading market sectors higher included: Tech (QQQ), Small Caps (IWM), Financials (XLF), Healthcare (XLV), Consumer Discretionary (XLY), Retail (XRT), Small Cap Value (VBR), Homebuilders (ITB), Transports (IYT), Solar (TAN), Australia (EWA), Base Metals (DBB) and Silver Miners (SIL).
Leading market sectors lower included: China (FXI), Japan (EWJ), Hong Kong (EWH), Indonesia (IDX), Turkey (TUR), Chile (ECH), Gold (GLD) and Crude Oil (USO).
Volume was once again quite light but breadth per the WSJ remains positive.
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Gilead Sciences (GILD) rises sharply on Hepatitis C drug while Amgen (AMGN) falls on weaker earnings.
Earnings reports are doing what they generally do, beat much lowered estimates. Nothing new about that.
PMI Manufacturing Index Flash, New Home Sales and Energy Inventories are on tap for Wednesday.
Let’s see what happens.
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Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com
|WTI Crude Futr||101.65||-0.10||-0.10 %||07:40|
|US Dollar||79.99||0.01||0.01 %||16:59|
|Brazil||2333.115||-0.58 %||3.15 %||5.18 %|
|Russia||644.792||-0.40 %||-4.22 %||-18.06 %|
|India||437.606||-0.75 %||-0.38 %||7.44 %|
|China||59.688||-0.32 %||0.48 %||-5.41 %|