On the Cyprus front, there was little major news since Cyprus banks remain closed until Thursday. Yesterday's "template" of banking actions -- imposing losses on the private sector rather than a bailout from the public sector -- continued to be reiterated in the EU Parliament.
In the US, while there was a good deal of new data, the results were mixed. The early durable goods orders report showed a large increase in orders, though mostly due to large aircraft orders. Monthly durable goods orders rose 5.7% in February from last month's 3.8% decline. This decline was revised up from the prior 5.2% drop. However, the ex-transports index fell 0.5%, less than the estimated gain of 0.6%, which highlighted the weakening demand under the surface.
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In home sales data, new home sales dropped to an annualized rate of 411,000 from last month's 431,000 (previously 437,000). S&P/Case-Shiller home price data showed an annual rise in the composite index of 8.08%, more than the 7.85% expected, and up from 6.84% last month. Note that this data is from January so it is a bit stale.
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Lastly, consumer confidence provided the most dire warning, even more so because it is partially tied to the performance of the stock market. The Conference Board's measure of consumer confidence dropped to 59.7 in March from 68.0 last month, largely tied to decreased feelings toward future economic expectations. The present situation subindex dropped to 57.9 from 61.4, and future expectations dropped to 60.9 from 72.4. Year to date, the index has dropped to 59.7 from 66.7 as real incomes have fallen.
US stocks closed near their highs of the day as the Dow Jones Industrial Average gained 0.71%. All 10 of the S&P 500 sectors were in positive territory, led by healthcare (XLV) and energy (XLE). Treasuries traded higher throughout the day after making a low in the early parts of the US equity session. The US Treasury auctioned $35 billion worth of 2-year notes at a high yield of 0.255%.
Tomorrow's Financial Outlook
More home sales data is on the calendar for tomorrow in the form of pending home sales data. On a annual basis, pending home sales are expected to rise 9.2%, down from a 10.4% rate the month prior. Additionally, mortgage purchases and refinancing activity will be reported before the market open.
There will be a number of Federal Reserve officials speaking tomorrow. Boston Fed President Rosengren, Cleveland Fed President Pianalto, and Minnesota Fed President Kocherlakota will all speak tomorrow on the economy and monetary policy. Of the three, only Rosengren is a voting member on this year's FOMC, and his recent commentary has been very dovish.
Global economic data on the calendar includes Japanese retail sales, eurozone consumer inflation, and eurozone consumer confidence. Year to date, the Japanese Nikkei stock index is up over 20% and retail sales are expected to rise at a 0.5% monthly rate. Eurozone consumer confidence is expected to decline to 90.5 from last month's 91.1.
Notable earnings include PVH Corp. (PVH) and Red Hat (RHT).
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