Positive data readings from the USA helps SPX reach a new record high

Apr 2 • Morning Roll Call • 2915 Views • Comments Off on Positive data readings from the USA helps SPX reach a new record high

shutterstock_115536316A raft of positive data readings from the USA ensured that a positive mood enveloped the USA bourses throughout the afternoon trading sessions. According to the ISM manufacturing report the USA economy grew for the 58th consecutive month and the manufacturing sector expanded for the 10th consecutive month. The ISM index optimism was supported by Markit economics manufacturing index which was equally positive coming in at 55.5.

Consumer confidence picked up in April – The IBD/TIPP Economic Optimism Index gained 2.9 points, or 6.4% in April, posting a reading of 48.0 vs. 45.1 in March.

March 2014 Manufacturing ISM Report On Business

Economic activity in the manufacturing sector expanded in March for the 10th consecutive month, and the overall economy grew for the 58th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. The March PMI® registered 53.7 percent, an increase of 0.5 percentage point from February’s reading of 53.2 percent, indicating expansion in manufacturing for the 10th consecutive month. The New Orders Index registered 55.1 percent.

US Consumer Confidence Brightens In April

The IBD/TIPP Economic Optimism Index gained 2.9 points, or 6.4% in April, posting a reading of 48.0 vs. 45.1 in March. The index is 3.1 points above its 12-month average of 44.9, 3.6 points above its reading of 44.4 in December 2007 when the economy entered the recession, and 1.3 points below its all-time average of 49.3. Note: Index readings above 50 indicate optimism; below 50 indicate pessimism. The IBD/TIPP Economic Optimism Index has a good track record of foreshadowing the confidence indicators put out later each month by the University of Michigan and The Conference Board.

Markit U.S. Manufacturing PMI final data

March data indicated that the U.S. manufacturing sector remained on a solid growth footing, with output levels and new business volumes both rising sharply. The latest increase in new work was slower than in the previous month, but still the second-fastest since May 2010. Meanwhile, the rate of production growth was little-changed from the near three-year high recorded in February. Survey respondents commented on a combination of improving underlying demand and a catch-up effect following the weather-related slowdown seen earlier in the year. Adjusted for seasonal influences, the final Markit U.S. Manufacturing PMI registered 55.5.

Market overview at 10:00 am UK time

The DJIA closed up 0.46%, the SPX up 0.70%, NASDAQ up 1.64%. Euro STOXX closed up 0.78%, CAC up 0.80%, DAX up 0.50% with the FTSE up 0.82%. The DJIA equity index future is up 0.46%, SPX future up 0.71%, NASDAQ future up 1.79%. The euro STOXX future is up 0.56%, DAX up 0.25%, CAC up 0.74%, FTSE up 0.66%.

NYMEX WTI oil was down 1.81% on the day at $99.74 per barrel with nat gas down 2.17% at $4.28 per therm. COMEX gold was down 0.30% at $1268 per ounce with silver down 0.06% at $19.74 per ounce.

Forex focus

The euro rose 0.2 percent to $1.3793 evening in New York, after gaining 0.2 percent during the previous two days. It reached $1.3815, topping Monday’s high of $1.3809. The shared currency appreciated 0.6 percent to 142.97 yen after climbing to 143.07 yen, the highest level since March 13th. The dollar strengthened 0.4 percent to 103.65 yen after reaching 103.71, highest since March 7th. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major counterparts, was little changed at 1,015.77.

The euro strengthened for a third day against the dollar after a German report showed unemployment fell more than economists forecast, adding to signs the region’s recovery is gathering momentum.

The Aussie gained as much as 0.4 percent to 93.04 U.S. cents, the strongest since Nov. 21st, before weakening 0.2 percent to 92.47.

The pound fell for the first time in seven days versus the dollar after a U.K. purchasing managers’ index declined to 55.3, the lowest since July, from a revised 56.2 in February, Markit Economics said. The median estimate in a Bloomberg News survey was for a reading of 56.7. Sterling fell 0.2 percent to $1.6630 after gaining more than 1 percent the previous six days, its longest winning streak since July.

Bonds briefing

The 30-year bond yield climbed five basis points, or 0.05 percentage point, to 3.61 percent at 5 p.m. in New York. It was the biggest jump on a closing basis since March 4th. The yield touched an eight-month low of 3.49 percent on March 27th. The price of the 3.625 percent security maturing in February 2044 dropped 7/8, or $8.75 per $1,000 face amount, to 100 11/32.

The benchmark 10-year note yield advanced three basis points to 2.75 percent, and two-year note yields increased one basis point to 0.43 percent. Treasuries fell, pushing 30-year bond yields up for a third day for the first time in three weeks, as a gauge of U.S. manufacturing boosted wagers the recovery in the world’s biggest economy is gaining momentum.

Fundamental policy decisions and high impact news events for April 2nd

Wednesday sees building approvals published from Australia, expected to come in down -1.7% on the month. UK Nationwide HPI is expected in up 0.7% for the month. Spanish unemployment is expected to have fallen by 5.3K. Construction PMI in the UK is expected in at 63.1. Final GDP for Europe is predicted in at 0.3% QoQ whilst day two of the ECOFIN meetings continue.

In the USA we have the ADP private jobs report published, expected to show 192K extra jobs created. Factory orders in the USA are predicted to come in at 1.3% up on the month.
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