Daily Market Color

Global Equities Advance With Commodities On Better Appetite for Risk

US stocks are trading higher, following global equities, while Treasuries are selling off marginally off the back of a better tone to risk assets.  Strong corporate earnings in Europe, an offer on debt relief for Greece, and Bank of Japan stimulus optimism all contributed to the upbeat sentiment.  Oil prices also rebounded today as supply disruptions in Canada (wildfire) and Nigeria (terrorist attacks) overshadowed concerns over rising crude inventories in the US.  Macquarie put out a research note today stating that oil markets could be on the path to rebalance by the end of this year, as non-OPEC producers continue to dial-back production.  WTI and Brent crude are currently trading higher 2.50% and 3.75%, respectively.
In terms of data, today’s release of the JOLTS report, one of Fed Chair Yellen’s closely watched labor market-related metrics, showed US job openings increased in March despite the slowdown in April payrolls gains.  The report showed job openings remain near a record high, second only to the record level reached last July.  The underlying data shows the increase in the number of job openings across sectors has been uneven.  Industries such as professional and business services or education and health services have record levels of hiring, while manufacturing and construction have still not recovered to the number of job openings seen prior to the recession. 

Aside from the economic releases, corporate quarterly earnings reports continue to influence market sentiment, and new corporate and government bond issuance remain active, including the US Treasury selling $24 billion of three-year notes today.  All three major US stock indexes are currently up close to 1%, while Treasury yields and swap rates are flat to up two bps across the curve.


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