US equities remained around the flat line for the majority of the day, probing slightly in both directions. Economic data in the form of durable goods orders was rather poor, but given the already-received manufacturing data for March, the downward response was rather muted. The headline March durable goods orders fell 5.7%, largely sparked by a decline in airport orders. Even still, the core metrics of the report were rather poor and February's numbers were also revised sharply lower.
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A consensus is growing in Europe that the ECB will cut its main refinancing rate at next week's meeting. Strategists at RBS, UBS, JPMorgan, and Barclays all released forecasts today that the ECB would lower its main rate to 0.50% from 0.75%. However, it's not likely that this cut will have any material effect on the economy as real funding rates remain near zero after two rounds of extraordinary loans to banks in the eurozone.
The Treasury sold $35 billion of 5-year Treasuries at a high yield of 0.70%, which was 0.8bps through the when-issued yields at the time of the auction. Demand statistics were stronger with the bid-cover ratio at 2.86 versus the 10-auction average of 2.73.
In the pre-market, Boeing (BA) beat on both EPS and revenues and guided up on full-year revenues and EPS. Also in the pre-market, Procter & Gamble (PG) beat on EPS, missed on revenues, and guided lower for the coming quarter citing choppy economic conditions. Procter & Gamble has seen a strong 24% rally this year due to its rather sizable dividend yield of more than 3%.
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Tomorrow's Financial Outlook
The US economic data on the calendar for tomorrow is on the lighter side. In the morning, weekly jobless claims are expected to remain unchanged at 352,000 and below the 4-week moving average of 361,300. The regional Kansas City manufacturing survey is expected to rise slightly to a reading of -2 from -5.
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The global calendar is equally barren with only UK GDP estimates from the 1Q and late in the day, Japanese consumer inflation. In the UK, 1Q GDP is expected to rise on an annualized basis to 0.4% from 0.2% the quarter prior. On a quarterly basis, GDP is expected to rise 0.1%.
Tomorrow will be the busiest day of the week for US earnings. Notable reports include Coca-Cola (KO), Exxon Mobil (XOM), ConocoPhillips (COP), UPS (UPS), Starbucks (SBUX), and Amazon (AMZN).
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