Daily Market Color

Risk on! Strong Tech Earnings

ECB Stands Pat

The European Central Bank met today and decided to leave rates unchanged and make no changes to the current asset purchase program.  Through at least the end of September, the ECB will continue to purchase 30 Billion EUR of assets per month.  In addition, the ECB was mindful of the overall economy as growth recently slowed and may warrant a continued cautious approach to monetary policy and any changes to the asset purchase program.  The Central Bank acknowledged that a stronger currency and potential global trade tensions could provide a challenge to the export heavy economies of the Eurozone.  Inflation remains below the ECB target rate, unexpectedly ticking down 0.1% to 1.3%, though this doesn’t seem to be overly concerning to the voters in the ECB.


Jobless Claims Fall

Initial claims for the week that ended April 21st fell to 209k from 233k in the prior week, 21k better than the estimates of 230k.  A healthy job market is considered to be any number below 300k.  The 209k recorded last week is the lowest number of initial claims the market has seen since December, 1969.  However, some of this exuberance can be explained through seasonality with the education service workers in New York State returning to work after the being on spring break recess in the prior week.  In NY state, claims surged by 15k in the week ending April 14th before dropping by 18k in this most recent report.  Continuing claims fell 29k to 1.837 million for the week ending April 14th, beating consensus estimates of 1.85 million.  Overall this is another strong report with one more to go before the monthly payroll report due from the Labor Department on May 4th.


Risk on For Earnings

Major US stock indices posted gains as the market continues to focus on corporate earnings, with Facebook easily beating estimates after yesterday’s close, and Amazon and Intel posting strong performances after the closing bell today.  The NASDAQ led the way today with a 1.64% gain, +1.04% for the S&P 500 and a DJIA gain of 0.99%.  US Treasurys rallied for the first time in 9 days today, as yields/swap rates were down 0-5bp across the curve.  The 10-year note yield couldn’t hold its psychological 3% level, closing at 2.98%.  The US Dollar was up against both the Euro (EUR) and the Pound (GBP), up 0.5% and 0.1% respectively.  Crude oil futures rose today, climbing to $68.20 – up 0.2%.

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