- Fed's Beige Book: Overall activity showed slight to modest growth in 8 of 12 districts
- ECB sources report: Policymakers wary of April rate hike
- Japan's Katayama said she spoke with Bessent about currencies
- US and Iran said to be weighing two-week ceasefire extension
- US EIA weekly crude oil inventories -913K vs +154K expected
- US NAHB April housing market index 34 vs 37 expected
- Ceasefire in Lebanon will be approved tonight - report
- Fed's Hammack signals "patient policy" as Fed navigates five-year inflation miss
- Canada February manufacturing sales +3.6% vs +3.8% expected
- Empire Fed April manufacturing index +11.0 vs -0.5 expected
Markets:
- Gold down $46 to $4749
- WTI crude oil down 28-cents to $90.99
- US 10-year yields up 2.5 bps to 4.28%
- AUD leads, JPY lags
It was another big day in the market as the Nasdaq rose for an 11th consecutive day. The combination of hopes for peace in the Middle East combined with AI optimism has led to a powerful rebound. The question now is whether there is some retracement or whether the FOMO afterburners kick in during earnings season.
- S&P 500 up 0.8% --- first record closing high since Jan 27
- Nasdaq up 1.6% to first record closing high since October 29
- Russell 2000 +0.1%
- DJIA -0.2%
- Toronto TSX Comp +0.2%
The numbers here highlight some of the divergence as tech is carrying this rally. That shows that it's that sector and a re-leveraging in it that's mostly driving the move. The real economy stocks didn't do much on Wednesday, though they've all had a big bounce from the lows.
What worries me is that we've seen big moves in things like quantum computing stocks that are a fair proxy for retail and options activity. That can sometimes be a leading indicator but it's fragile.
For what it's worth, there wasn't much validation of the stock market move elsewhere. Treasury yields were 1-3 bps higher across the curve and oil was down just 28-cents while gold was lower. The FX market did see some positive bids in commodity currencies but the euro was flat. Australian jobs data is due later.
It looks like we will need a fresh catalyst or actual peace deal to move the needle from here but earnings have also been good and financials have been bid on strong numbers all week. The commentary from banks was also generally good for the real economy and the economic data since the war began has been constructive. Tomorrow we get numbers on initial jobless claims and the Philly Fed.
