Stocks Decline on Mixed Economic Data
Following early volatility on the back of conflicting economic data reports, the S&P 500 (^INX) finished modestly lower on the day.
In early-morning trading, US futures were slightly down, indicating low expectations heading into the advance first-quarter GDP report. The caution was warranted as GDP expanded by 2.5%, which was well below the 2.8% consensus.
Then at 9:55 a.m., the April University of Michigan Sentiment Survey was released. Interestingly enough, stocks rose and the VIX (INDEXCBOE:VIX) fell just before the above-consensus 76.4 numbers. But the positivity didn't last as the GDP numbers, as well what has been a relatively mediocre earnings season, loomed large in traders' minds.
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Amazon (AMZN) was a notable decliner today following its earnings report on Thursday. After an initial reaction that saw the stock trade as high as $290.88 yesterday afternoon, the company's tepid revenue guidance shut the party down and the stock fell 7% on Friday. Among today's batch of earnings reports, we saw beats from DR Horton (DHI) and Chevron (CVX), but misses from LyondellBasell (LYB) and National-Oilwell Varco (NOV). Elsewhere, we saw a sharp rally in JC Penney (JCP) on news that George Soros took a large stake in the struggling retailer, while Facebook (FB) powered higher on an analyst upgrade. The cautious tone among stock traders extended to the bond market, as the US 10-year Treasury Yield fell throughout the day.
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(For fixed-income guru Peter Tchir's take on the US Treasury Market, we highly recommend watching a replay of our recent webinar, here.)
Monday's Financial Outlook
On Monday, we have some important economic data points on the calendar, with the Personal Income, Personal Spending, and PCE Price coming at 8:30 a.m. EDT. At 10:00 a.m., we'll see the March Pending Home Sales report.
Earnings season will also steam along on Monday. Notable names reporting include Eaton (ETN), Health Net (HNT), and Penske Auto (PAG) before the open, and Express Scripts (ESRX), Hartford Financial (HIG), and Herbalife (HLF) after the close.
Given the recent streak of mixed economic and earnings data, we would suspect that expectations are fairly low heading into next week. Nonetheless, many market participants are desperately waiting for a catalyst for a pullback, so at least some caution is probably warranted.
Twitter: @Minyanville
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