Daily Market Color

S&P Riding High on Corporate Earnings

S&P 500 and Nasdaq post record-high closes
The S&P and Nasdaq rallied to start the week, increasing 0.2% and 0.9%, respectively, to close at record highs. Equities continue to be driven by strong corporate earnings, with more than three-quarters of the S&P companies beating Wall Street earnings estimates thus far. Rates were quiet on the day, increasing slightly on flattening curve as the 10y UST yield closed 1bp higher to 1.56%. The two-day FOMC meeting starts tomorrow — investors are confident the Fed will stick to its accommodative approach but will be on the lookout for any changes to the Committee’s outlook on policy tightening.
Large bank loan growth breaks free to start Q2
After lackluster loan growth in Q1, large banks (top 25 in asset size within the U.S.) are seeing early signs of growth to start Q2. During the first two weeks of the second quarter, large banks have seen QTD annualized growth in C&I and CRE of 20.9% and 5.1%, respectively. Small banks (those outside the top 25 in asset size) showed similar growth in C&I with 17.7% in QTD annualized growth to start Q2. However, small banks have seen a contraction in their CRE portfolios to start the second quarter.
Durable good orders miss estimates
U.S. durable goods orders, items expected to last at least three years, increased less than estimates driven by lower bookings for commercial aircraft. Orders increased 0.5% month over month in March, after declining 0.9% in February. Median economists’ estimates called for an increase of 2.3%.

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