Turnaround Tuesday is in the books and stock futures (/ES) are suggesting that the rally of the past two days will continue, as the arrows are green across the board. Better than expected earnings from Yahoo (YHOO) and CSX Corp. (CSX) also made investors more optimistic about the outlook for Q1 earnings. Stocks traded in a wide range yesterday but the Bulls took control the last hour as light volumes contributed to the big swings. The CBOE Volatility Index (VIX) also had a wild ride yesterday. The ‘Fear Gauge’ ended the session down 3% but was up 8% at one point during the session. Economic data and geopolitical tensions in the Ukraine contributed to the choppy markets which we could see continue in the near-term.
Treasuries dipped slightly lower, in tandem with losses in sovereigns overseas, as equities climb. The 10-year yield has edged up to 2.65%. Japan's Nikkei outperformed markets with a 3% surge, helped by positive Chinese data. This included a 7.4% growth rate in Q1 GDP, a rise in retail sales and a gain in industrial production. Japanese production fell 2.3% in February, meeting expectations. U.K. unemployment rate fell more than expected to 6.9%, while Euro-zone inflation was in line with forecasts. Of importance in the U.S. today will be a speech from Fed Chair Yellen before the Economic Club of NY at 11:15 CT. That's been a venue for policy insights from other Fed chiefs. The Fed also releases its Beige Book for the upcoming April 30 FOMC meeting this afternoon. There will be Fed-speak from Lockhart and Fisher too. Data includes March housing starts and March industrial production, as well as weekly oil inventories. The MBA posted a 4.3% rebound in mortgage applications this morning. Earnings announcements are due from Google (GOOG), American Express (AXP), IBM (IBM) and Abbott Labs (ABT).
Stock Stories:
Yahoo (YHOO) – Fuzzy – The internet company posts earnings that beat on the top and bottom line numbers after the close yesterday, albeit minimally. The 24% stake they own in the Chinese internet company (Alibaba) is the main driver for the stock at this point as the firm continues to lose ground in their space. The shares are up 8% in the pre-market after an analyst upgrade this morning.
Bank of America (BAC) – Mixed – The banking giant reported positive quarterly EPS ex-litigation this morning. The company beat on the top line also but settlement costs are weighing on the results. The stock is flat ahead of the opening bell.
Major Economic Reports:
6:00 am CT – MBA Purchase Applications – Up 4.3% for the week
7:30 am CT – Housing Starts
8:15 am CT – Industrial Production
9:30 am CT – Oil Inventories
1:00 pm CT – Beige Book
Notable Earnings:
Before Market: ABT, BAC, CS, PJC, PNC, STJ, USB
After Market: AXP, COF, GOOG, IBM, KMI, NE, SLM, SNDK
