Stocks Rise as Traders Digest Data and Powell Comments

Equity traders have returned from the Easter weekend in a positive mood. Boosted by better than expected Chinese Manufacturing PMI and Non-Manufacturing PMI which both increased from last month and came in above 50 in expansion territory, Shanghai rallied 1.2% overnight and Hong Kong gained 0.9%. The Nikkei, however, continued to fall away from 40,000, losing 1.4% after Japan Manufacturing PMI remained steady below 50 in contraction territory. In Europe today, the Dax is up 0.1% and the FTSE is up 0.2%.

US index futures are up 0.2%-0.4% this morning. On Friday Fed Chair Powell indicated that the US central bank is in no hurry to cut interest rates because the economy continues to do well, a positive sign heading into earnings season which starts later next week. US Core PCE inflation, the Fed’s preferred measure, held steady and was in-line with expectations at 2.8%. The US 10-year treasury note yield is steady just above 4.20%.

Currency action is mixed. Gold has gained 1.4% and is trading at another new all-time high, while Bitcoin is down 2.1%. In commodity trading, Copper is up 1.3% on the China news, while US Crude Oil is holding steady.

It’s a big week for economic news. Today, Canada Manufacturing PMI (previous 49.7) is due at 9:30 am EDT. US ISM Manufacturing PMI (street 48.4) follows at 10:00 am along with US Construction Spending (street 0.6%). Tomorrow brings four Fed speakers and Manufacturing PMI reports from Europe. Powell speaks again on Wednesday, the same day that ADP payrolls come out. US nonfarm payrolls and Canada jobs headline Friday numbers.

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