Daily Market Color

US Markets Exude Calmness as Stocks Touch Record Highs

Trading in US financial markets was relatively stable for a second consecutive session.  Treasurys experienced a mild sell off, pushing yields/swap rates up 1-2 basis points across the curve, with the 10-year note yield topping 2.40% for the first time in over a month.  The US dollar similarly rose to its highest level in nearly a month, up 0.5% for the second straight day against leading global currencies.   All three major stock indices are trading near unchanged for the session, settling down from this morning when both the S&P 500 and Nasdaq, led by technology stocks, touched intraday record highs.  Crude oil prices continue to trend lower, down 0.75%-1% today after it was reported that US production is forecast to increase to a record 9.96 million barrels per day in 2018.  WTI crude is now trading close to $46/barrel, down nearly 15% YTD.       

The Job Openings and Labor Turnover Survey (JOLTS) headlined a light day of meaningful economic reporting, displaying results consistent with a tightening jobs market.  Detailed in the release, the number of US job openings rose by 61,000 in March to a seasonally adjusted pace of 5.74 million, representing an 8-month high.  Openings in the manufacturing and business services industries exhibited the largest increases, up 26,000 for the month.  Both the hiring rate and quits rate held steady during March at 3.6% and 2.1%, respectively.  The quits rate remained just below the post-recession high of 2.2%, a positive signal for the outlook for wage growth, as workers feel confident in their ability to earn higher salaries elsewhere.  Other US economic data on the day included wholesale inventories, which was reported with a 0.2% increase in March. This exceeded market expectations of a -0.1% MOM change in the index, as builds in auto inventories and stockpiles of electrical goods highlighted activity.

In Asia, the South Korean presidential election concluded today with a victory for liberal Moon Jae-in, effectively ending nearly a decade of conservative rule.  Following the impeachment of former President Park Geun-hye back in March amid corruption charges, Moon stepped in as the early favorite with his underlying campaign promises of tougher action on family-run conglomerates in the region as well as improved relations with North Korea.

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