US Equities Bounce Back, Rates Rise as Fink Says Markets Poised for “Melt-Up”

 

Strong earnings push US equities closer to all-time highs. Financials performed well as strong Q1 results from BlackRock and Bank of America helped the market bounce back from yesterday’s disappointing figures. Johnson & Johnson and United Healthcare Group also reported strong earnings, helping the S&P 500 climb 0.05% while the Dow Jones Industrial Average climbed 0.26%.

 

 

Rates grind higher amid risk asset rally. The trading session was largely devoid of major macroeconomic news, though industrial production did come in lower than expected. National Economic Council Director Larry Kudlow told reporters that the administration is still backing controversial Fed candidates Herman Cain and Stephen Moore, though he left the door open for other individuals to be considered, saying “we’re talking to a number of candidates, we always do.” Treasurys sold off as US markets largely received good news in corporate earnings. 10 year Treasury yields ultimately closed up 3.6 basis points to 2.59%.

 

 

Larry Fink says markets are poised for a “melt-up.” The CEO of the world’s largest asset manager attributed his belief to the goldilocks scenario of improving economic data and dovish central bank policy. Fink also believes investment will flow back into risk assets after investors pulled significant cash towards the end of 2018. Thus far in 2019 investors have continued to pull cash from equity portfolios, but fixed income portfolios and ETFs in particular have begun to garner more assets: