Futures vs FV: SP -3.53; DJ -49.12; NASDAQ -2.15
Stocks are set to open flat to modestly lower as the Powell comments continue to work through the markets. Bond yields are higher, good to see given the Fed indicated it was not so dovish as prices implied.
Economic data is rather solid thus far.
Productivity Q1 prelim: 3.6% vs 2.3% exp vs 1.3% Q4 (from 1.9%). Strongest gains in productivity since 2014. This indicates that the tax cuts that were more business centric are indeed still at work.
Unit Labor Costs: -0.9% vs 1.6% exp vs 2.5% prior (from 2.0%). Wow. Quite the drop, but also from a pretty large Q4 increase even with the revision.
TSLA: Raising $2.3B from a stock/bond offering. The stock is up on this. Usually stocks fall on these announcements, but TSLA is known to be cash-starved, and those in love with the company are pleased.
Earnings beats: CI; UA; DNKN; TPX; QCOM (but says chip shipments will be down); SQ (lowered outlook)
Misses: DDPT (TL); W (BL); CSZ (BL); MET (TL)
Dividends: CAT increases its dividend 20%
Bonds: 2.52% vs 2.504%. Finally rising after the Fed said it was not so dovish as the market thought.
EUR/USD: 1.1195, +0.0001
USD/JPY: 111.50, +0.13
Oil: 62.43, -1.17
Gold: 1271.30, -12.90
Futures in a flat line for four hours. Apparently last night on his show Cramer said it was time to sell some. Some stocks will gap up (VMC unfortunately), others not. This is all part of a likely fade from the SP500 and NASDAQ prior highs as the market needs a breather after 5 weeks up, unable to break through, and then Powell piling on with his need for 'persistently low' prices to cut rates. Again, the market is digesting that last bit of information on top of the action at the prior highs.
That said, we will see how the bids return. It is not a situation where the sellers are swarming. The buyers are just not buying at the bell.
Jon Johnson, Chief Market Strategist
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