Markets were rather uneventful yesterday. Will this soon change? Both the Federal Reserve and the ECB will make monetary policy decisions and give signals as to what is next in the inflation fight. These announcements will be made on Wednesday and Thursday, respectively.
And then there are earnings. Tech behemoth Apple, which represents over 7% of the S & P 500, announces results on Thursday. APPL is up a dizzying 30% for the year and is a major reason for the positive performance of the S & P 500 for the year.
As widely discussed, Bloomberg writes 5 companies account for 80% of the benchmark’s 2023 gains.
Treasuries are considerably lower in yield from their March peak.
The above suggests the markets are perhaps poorly prepared for a more hawkish than expected Fed or ECB or from a stumble of the top mega cap technology firm.
Commenting on yesterday’s data, the Manufacturing ISM was close to expectations, printing 47.1 versus a forecast of 46.8 as new orders edged higher. The employment and inflation sub-indices both exceeded expectations offering little comfort that there has been nothing other than marginal improvement in the Fed’s dual mandate objectives.
Today the JOLTS Job Openings data is released. How will the data be interpreted?
Last night the foreign markets were mixed. London was down 0.02%, Paris down 0.44% and Frankfurt down 0.24%. China was up 1.14%, Japan up 0.12% and Hang Seng up 0.20%.
Futures are flat. Treasury Secretary Yellen stated that the debt ceiling may be reached by June 1. Late yesterday the Treasury Department increased its borrowing estimate for the April to June quarter to $726 billion compared with the $278 billion it predicted in late January. The primary cause was “significantly higher spending than previously projected” amplified by “lower than projected revenues.”
The 10-year is up 9/32 to yield 3.57%.
