The markets are trading flat this morning as the country moves on from coronavirus fears as Biden announced that Americans 16 and older will be able to receive the vaccine by April 19. California Gov. Newsom announced the opening of the state by June 15.
In coming weeks we expect to see a battle over a slimmed-down infrastructure bill, as Democrats expressed concern a number of their proposals may not survive the reconciliation process. As of now, we haven’t seen any surge in “clean energy stocks” and think the market is not expecting a boost from the bill or has already priced it in.
The Treasury market rallied Tuesday, recovering from recent losses and as technicals capped further selling. Inflation worries have also been fading a bit, at least for now, as policymakers continue to stress they do not see any problem with price pressures for the foreseeable future. The Fed has also assured it will not hike rates preemptively but needs to see real evidence that their goals are being met before acting. The 5-year yield richened over 5 bps to the 0.864% level.
The 10-year rate was pulled down too and was off 4.6 bps late in the day at 1.652%. Stocks were mixed most of the day but faded into the close and finished in the red. The Dow was down -0.29%, with the S&P 500 -0.1% lower, and the NASDAQ off -0.05%. Trading was lethargic, taking a breather from recent record highs on the broader indexes.
Key Market Movers:
- U.S. calendar has Feb trade report, consumer credit, weekly MBA mortgage data
- Canada calendar has Feb trade data and the March IVEY PMI
- Dollar down again amid extending Treasury yield slide, sputtering Wall Street
- Treasury yields have lifted slightly, Asian stocks traded mixed
- UK final Mar composite PMI revised fractionally lower, but still up strongly from Feb
- Eurozone final Mar services PMI revised up to 49.6, composite to 53.2
- RBI left key repo rate unchanged at 4.00% – as widely expected
Today’s slate isn’t likely to be a catalyst for and big moves in the markets. The February trade report features, with the deficit expected to widen to $69.5 bln from $68.2 bln in January. February consumer credit is due late in the session and is seen rising $5.0 bln versus the prior $1.3 bln decline. Weekly MBA mortgage and oil inventory figures are on tap as well.
The minutes from the March 16-17 FOMC meeting will be released. While they will be scrutinized for more info on the dots that showed four members plugging in rate hikes for next year, we don’t expect any major change in the uber-dovish stance to be reflected. For Fedspeak, Evans, Kaplan, and Barkin are on deck.
The only larger-cap earnings report is from RPM International.