Equities Pause after Six Up Sessions

Economic Data

- (RU) Russia failed to sell planned RUB10B indicated in May 2019 OFZ bonds (2nd failed auction in session)
- (UK) Apr CBI Industrial Trends Total Orders: -1 v +7e; Selling Prices: 9 v 10e; Business Optimism: 33 v 25e
- (US) MBA Mortgage Applications w/e Apr 18th: -3.3% v +4.3% prior (9th decline in last 11 weeks)
- (CA) Canada Feb Retail Sales M/M: 0.5% v 0.5%e; Retail Sales Ex Auto M/M: 0.6% v 0.5%e
- (MX) Mexico Feb Retail Sales Y/Y: -1.7% v +0.4%e
- (EU) Weekly ECB Forex Reserves: €209.4B v €209.2B
- (US) Apr Preliminary Markit Manufacturing PMI: 55.4 v 56.0e
- (US) Mar New Home Sales: 384K v 450Ke
- (US) DOE Crude: +3.52M v +2.5Me; Gasoline: -275K v -1.5Me; Distillate: +600K v -500Ke

- The S&P500 is in the red this morning after six consecutive sessions of gains off the mid April low. Weak US trading volumes continue this morning as indices remain under pressure. As of writing, the DJIA is down 0.57%, the S&P500 is down 0.05% and the Nasdaq is down 0.45%.

- New home sales tumbled to eight-month low in March, dropping 14.5% y/y. However the January and February totals were revised up 3% and 2%, respectively. Affordability is likely becoming a big factor for the market: the median new home price rose to a record high of $290K, up 13% y/y. Most of the major homebuilding names are in the red this morning, down 1-3% a piece.

- WTI crude is at two-week lows this morning around $101.25 after yesterday's big slide from the mid $103 handle. Note that last night, the API weekly inventory data showed the smallest build in crude inventories in three weeks, way short of expectations. This morning, the DoE data showed a bigger than expected build in crude inventories. Note that total US inventories are only a few million barrels away from all-time highs seen last May.

- Dealers were hoping that the preliminary eurozone April PMI releases would help break the euro out of its recent trading range. The mostly in-line performance sent EUR/USD up to 1.3855 but left the pair locked in its 200 pip April range. Analysts said the PMIs released today only strengthened the feeling that new initiatives by the ECB seemed unlikely in May. Cable weakened after the BoE minutes showed governors are concerned about downward pressure on the inflation front.

- Amazon and HBO have announced a licensing agreement that will let Amazon Prime members watch HBO content. The first wave of HBO content, shows like The Wire and The Sopranos, will arrive on Prime Instant Video by May 21st, with other recent shows like Girls and Newsroom rolling out later, approximately three years after they've aired on HBO. In addition, HBO GO will also be available on Amazon's Fire TV by the end of the year. Shares of NFLX are down 3% or more on the news.

- Defense names General Dynamics, Boeing and Northrop Grumman are all up about 2% a piece this morning after reporting decent first quarter results. All three firms beat both top- and bottom-line expectations, and Boeing and Northrop raised FY14 earnings guidance. Boeing's revenue rose 8% y/y thanks to strong demand for commercial aviation models, however revenue at GD and NOC declined on a y/y basis as Pentagon cuts continue to eat into the defense industry.

- Delta had gained as much as 6% in early cash trading this morning after beating top- and bottom line estimates and offering pretty strong performance despite the winter weather turmoil seen in its first quarter. Revenue gained 5% y/y and income was up around 70% y/y.

- Dow Chemical's net income was up approximately 48% y/y, beating expectations. The company has gone through an extended restructuring process over the last year, and still has some time to go. The company's cost cutting helped raise margins. DOW is up 2% presently.

- Shares of consumer name Procter & Gamble are in the red after the firm cut its FY14 earnings guidance. Earnings in its third quarter gained 5% or so and beat expectations, although revenue was basically flat. The company is spinning off most of its pet care business to Mars, and it said a final decision on the sale of its remaining EU pet care assets will be made in May. 

Looking Ahead

- 11:30 (BR) Brazil Weekly Currency Flow
- 12:00 (CA) Canada Fin Min Oliver speaks to Montreal Board of Trade
- 12:00 (CA) Canada to sell 10-Year Bonds
- 13:00 (US) Treasury to sell 5-Year Notes
- 17:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to raise Official Cash Rate by 25bps to 3.00%
- 17:00 (CO) Colombia Feb Trade Balance: -$90Me v $157.4M prior; Total Imports: $4.8Be v $4.8B prior
- 19:00 (KR) South Korea Q1 Preliminary GDP Q/Q: 0.8%e v 0.9% prior; Y/Y: 3.8%e v 3.7% prior
- (PT) Portugal Year-to-Date Budget Report