 |
The market ended the day mixed with light volume. For the week, all three major indices moved modestly higher and closed at the best level in more than 3 months. The Dow Transportation Average continued to outperform the broad market --- it gained 1.2% for the day, bringing its total year-to-date gain to 12% compared with a 4.8% drop in the S&P 500 index. The economic news of the day was quite negative. The US consumer sentiment index fell more than expected in April to 62.6, the lowest in 26 years. Earnings continued to be the driving forces behind today’s market action. Microsoft’s disappointing guidance weighed heavily on technologies throughout the day while a better-than-expected earnings report from American Express gave financials a boost.
Other than financials, commodities were also among the noticeable winners as the CRB commodity index reversed its loss in the previous two days and ended the day higher by 0.7%. But taking a closer look, one can find that it is really the strength in energies that offset weakness seen in agricultures and industrial metals. The US dollar continued to move higher against most major currencies as traders trimmed their bets for the interest rate cut on April 30th. Treasuries were again sold off sharply, which was partly caused by strength in equities and partly caused by activities in Japan. Overnight, Japanese bond prices tumbled as traders feared that its central bank may soon increase the overnight interest rate due to inflation concerns. In fact, the price drop was so dramatic that the Tokyo Stock Exchange was forced to order a 15-minute halt in trading. As for next week, the biggest event is certainly the Fed interest rate decision on Wednesday. Currently the market believes there is a 25% chance that the Fed will keep the rate steady.
|
|
|
