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The U.S. and European stock markets ended significantly lower Tuesday, with the Dow Jones being the outlier. While there seems to be no material shift in investor sentiment and stock rotation strategy, there was a surprising statement from Treasury Secretary Janet Yellen: “Interest rates may need to rise to prevent the economy from overheating.” In contrast, it is highly improbable that the Fed will change its current low interest-rate policy. Bear in mind that the stock markets remain at a stone’s throw from all-time highs.
As we review the corporate earnings season, we note that, with 67% of the S&P 500 companies having reported 1Q21 results, a whopping 80% exceeded expectations.
Several key benchmarks reported:
- U.S. Trade Deficit rose to $74.45 Billion, up from $70.52 Billion last month, rising 5.57%.
- U.S. Manufacturing New Orders rose to $512.86 Billion, up from $507.09 Billion last month, a change of 1.14%.
- U.S. Manufacturing Shipments rose to $513.56 Billion, up from $502.76 Billion last month, a change of 2.15%.
As we discussed, the stock rotation during the day’s session took full swing at the tech stocks, which had their worst day since March.
Some of the notable stocks affected were:
- Apple (AAPL): closed at $127.70, down $4.84, or 3.65%.
- Microsoft (MSFT): closed at $247.70, down $4.16, or 1.65%.
- Facebook (FB): closed at $318.00, down $0.58, or 1.42%.
- Alphabet (GOOG): closed at $2,351.00, down $44.17, or 1.84%.
- Stoxx 600 closed at 433.65, down 6.27, or 1.43%.
- FTSE 100 closed at 6,923.17, down 46.64, or 0.67%
- Dax index closed at 14,856.48, down 379.99, or 2.49%.
Wall Street Summary:
- The Dow Jones Industrial Average closed at 34,133.03, up 19.80 points, or 0.06%.
- The Standard & Poor’s 500 closed at 4,164.66 down, 28.00 points, or 0.67%.
- The Nasdaq Composite Index closed at 13,633.50, down 261.62 points, or 1.88%.
- The Birling Capital Puerto Rico Stock Index closed at 2,532.18, up 36.03 points, or 1.88%.
- The U.S. Treasury 10-year note closed at 1.61%.
- The U.S. Treasury 2-year note closed at 0.16%.