Investors have returned from the Easter weekend in a mixed mood. European indices are on the rise this morning with the Dax up 0.6% and the FTSE up 0.2%. On the other hand, US index futures are down 0.1% to 0.6%, adding to last Thursday’s declines.
Chinese markets were mixed overnight following mixed economic news. Hong Kong gained 0.6% but Shanghai fell 0.5%. The biggest impact of recent lockdowns appeared in a disappointing retail sales report (-3.5% vs street -1.6% and previous 6.7%). On the other hand, Q1 GDP (4.8% vs street 4.4%), fixed asset investment (9.3% v street 8.5%) and industrial production (5.0% vs street 4.5%) all beat expectations.
Traded interest rates continue to climb with the US 10-year treasury note yield breaking through 2.8% today to reach its highest level since late 2018. This move appears to have put a headwind in front of stocks, and a tailwind behind the US Dollar. The most interesting action today is a 1.1% gain for gold which once again is approaching $2,000/oz, and a 2.2% decline for Bitcoin, suggesting some investors are positioning defensively.
Commodity action finds natural gas soaring 3.8% today and trading above $7.50/mmbtu, while WTI crude oil is up 0.4% and trading near $107.50/bbl. Copper is down 0.75% but platinum is up 1.75% and silver is up 2.75%.
A big week for earnings reports has started positively with Bank of America beating expectations ($0.80 vs street $0.75) with results boosted by strong traditional banking and a reduction in loan loss provisions. Senior companies across multiple US sectors including Technology, Banking, Mining, Drilling, Airlines, Railroads and more report results this week, headlined by Netflix tomorrow and Tesla on Wednesday.