Jobless Claims rose slightly from 302K to 304K. The Philly Fed Survey was higher 16.6 vs 9 previously. Within the numbers the forward guidance was quite negative suggesting the reading reflects a weather catch-up as shown below by Zero Hedge:
Meanwhile hope springs eternal that China will revive stimulus even as bulls won’t take no for an answer. In fact Thursday Li stated there would only be a “prudent monetary policy” with no stimulus. This theme of “no stimulus” was repeated by state organ Xinhua News. Bulls still expect some loosening of tight credit as China housing construction fell 25% in the prior quarter.
Last night, earnings from Google (GOOG), International Business Machines (IBM) and American Express (AXP) all missing target earnings and/or revenues in one form or another. Much of this was dismissed by better perceived earnings from Morgan Stanley (MS) and Goldman Sachs (GS).
The former continues to use accounting trickeration as Debt Valuation Adjustments (DVA) helped earnings growth.
So what the hell are DVA’s? The accounting trick is a decline in the value of debt issued by Morgan Stanley should be deemed an addition to earnings. (Yeah, I know it’s a stretch, but the algos don’t have time to evaluate this stuff.)
Other earnings news Thursday featured a good report from Chipotle (CMG) and Pepsi (PEP) while mixed to poor results from General Electric (GE), DuPont (DD) and United Healthcare (UNH) were ignored in favor of publicized winners.
Fed Chair Janet Yellen, while looking at her crystal ball noted, the economy should achieve full employment by the end of 2016 and stellar GDP growth. To which one might cite former economist Edgar Fieldler: “If you must forecast, forecast often”.
Leading market sectors higher included: Energy (XLE), Broker/Dealers (IAI), Semiconductor (SMH), Industrials (XLI), Transports (IYT), Emerging Markets (EEM), Turkey (TUR), EAFE (VEA), Europe (VGK), Russia (RSX), Brazil (EWZ), Gulf states (MES), India (EPI), China (FXI), Natural Gas (UNG), Oil (USO) and Agriculture (DBA).
Leading market sectors lower included: Gold (GLD), Gold Miners (GDX), Silver Miners (SIL), Utilities (XLU), REITs (IYR), Homebuilders (ITB) and Bonds (TLT).
Trading overall on options expiration and the Good Friday Holiday was tame with bulls barely in control of conditions. But in the end it was a good week for them.
Chart of the Day: Market Vectors Gulf States ETF (MES) follows markets primarily weighted by financial sectors and not energy which are mostly state owned. Nevertheless the booming energy business throws off plenty of economic benefits to these economies. Note two high (HI) indicators with only the latter being effective as markets at that time were much overbought. From that point we’ve just moved sideways.
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume was light and breadth per the WSJ was mixed.
The week’s rally was mostly about Yellen’s commitments to keep interest rates low and abandoning silly unemployment rate thresholds. She even went so far as to predict (risky business) full employment by year-end 2016. That must mean the long term unemployed will just die off or disappear somehow. This won’t happen naturally and bold predictions like this are a mistake.
For most of the world it’s a long weekend. A lot of good or bad things can happen naturally and it’s certainly not my specialty to guess what those might be.
We know more earnings news will come out and they’ll be spun as only the financial media can do. Then economic data will feature Leading Indicators (Monday), Existing Home Sales and FHFA House Price Index (Tuesday), New Home Sales and PMI Mfg Index Flash (Wednesday), Durable Goods Orders and Jobless Claims (Thursday) and PMI Services Index Flash and Consumer Sentiment (Friday)
Enjoy your Easter fun and games.
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|WTI Crude Futr||104.30||0.54||0.52 %||17:14|
|US Dollar||79.93||-0.01||-0.01 %||04/17|
|Brazil||2335.192||0.00 %||3.24 %||5.28 %|
|Russia||651.881||1.77 %||-3.17 %||-17.16 %|
|India||440.148||0.00 %||0.20 %||8.06 %|
|China||59.879||0.00 %||0.80 %||-5.11 %|