Gold continued its spectacular plunge today, falling 9.3% by the close of floor trading. This caps a two-day drop of 13%. Heavy volume marked the day's trading with over 630,000 contracts, or 2.5x the open interest. This is almost two times the largest volume ever traded in gold futures; such high volume typically signals a capitulation event.
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Equities continued to deepen their sell-off throughout the day. Responding to the commodity volatility, equities opened the day 0.5% lower and remained in a downtrend throughout the day, eventually closing at 1552.37. In particular, the Russell 2000 and Dow Jones Transport indexes severely underperformed the broader market due to the commodity weakness. The Russell 2000 and Dow Jones Transports both closed down 3.8% today.
The two economic releases of the day were the New York regional manufacturing survey and the NAHB homebuilder and broker survey. Neither release was positive. The New York manufacturing survey declined to 3.05 in April from the prior 9.24, less than the 7.00 expected. The breakdown was highlighted by a slowdown in new orders and shipments. The NAHB survey, which measures future home sale expectations from homebuilders and real estate brokers, showed its third straight month of declines, falling to a reading of 42 from 44. The consensus estimate was for an increase to 45.
Overnight economic data showed growth declining in China. Real year-over-year growth in China slowed to a rate of 7.7% in the first quarter from the previous quarter's 7.9% rate. The consensus estimate was for 8% growth. Year-to-date industrial production slowed to 9.5% from 9.9% the month prior. While most Chinese markets were closed today, the Hang Seng Index was down 1.4%.
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Tomorrow's Financial Outlook
Tomorrow we receive consumer inflation data from March. The gauge is expected to rise 1.6% annually, down from 2% the month prior. Also on the schedule is monthly housing starts and building permits. Housing starts are expected to rise 1.4% to an annual rate of 930,000 while building permits are expected to rise 0.3% to an annual rate of 942,000. It's possible that building permits may miss to the downside due to softer consumption data in March. Lastly, we will also receive the industrial and manufacturing production figures from March.
Globally, the UK will release producer and consumer inflation indexes, and the eurozone will release its consumer inflation index. The eurozone's annual rate is expected to remain unchanged at 1.7%.
Tomorrow's earnings includes juggernauts like Coca-Cola (KO), BlackRock (BLK), US Bancorp (USB), WW Grainger (GWW), CSX (CSX), Intel (INTC), Yahoo! (YHOO), Johnson & Johnson (JNJ), and TD Ameritrade (AMTD).