Dramatic Headlines from the Persian Gulf Roil Markets

Economic Data

- (IE) Ireland Mar Property Prices M/M: +0.9% v -0.4% prior; Y/Y: 16.8% v 14.9% prior
- (IE) Ireland Mar Retail Sales Volume M/M: +1.4% v -0.1% prior; Y/Y: 9.2% v 9.3% prior
- (ES) Spain Mar YTD Budget Balance: -€9.9B v -€12.2B prior
- (US) Goldman Economist: Chain Store Sales w/e Apr 24th w/w: +0.8%; y/y: +2.5%
- (BR) Brazil Mar Unemployment Rate: 6.2% v 6.1%e
- (US) Redbook Retail Sales w/e Apr 24th: +1.4% y/y, Apr MTD: +0.2%; Apr YTD: +1.1%- 09:00 (US) Feb S&P/ Case-Shiller 20 City M/M: 0.93% v 0.70%e; Y/Y: 5.03% v 4.70%e; HPI NSA: 173.67 v 173.13e
- (US) Feb S&P/ Case-Shiller M/M: 0.42% v 0.53% prior; Y/Y: 4.22% v 4.41% prior; HPI NSA: 166.80 v 166.57 prior
- (US) Apr Consumer Confidence Index: 95.2 v 102.2e
- (US) Apr Richmond Fed Manufacturing Index: -3 v -2e

European markets have declined after Mondy's big equity gains, while in the US session markets have been shaken up by sensational headlines out of the Persian Gulf. The US 10-year yield has gained 3.7 basis points in the session. As of writing, the DJIA is up 0.24%, while both the S&P500 and the Nasdaq are about flat on the day.

A confusing dust-up in the Persian Gulf roiled markets mid-morning. Reports emerged around 10:00ET that Iran had seized a US cargo vessel, sending indices tumbling. Within an hour, a more complete picture emerged: apparently the Iranian Revolutionary Guard seized a Marshall Islands-flagged Maersk cargo ship in the Straits of Hormuz and the ship's distress call was answered by a US Navy destroyer, and warning shots were possibly fired by one side or the other. WTI briefly tested yesterday's highs around $57.80 and then gave up a buck.

The Conference Board's April Consumer Confidence Index declined to 95.2 from March's 101.4 reading, sinking to its lowest level since December. The lagging February S&P/Case-Shiller gained 5% year-over-year in February, compared with a 4.5% increase in January. Home prices in all nine US census divisions have increased for 34 consecutive months, according to the report's National Home Price Index.

Apple's outstanding second-quarter results sent shares of AAPL up 2.5% to all-time highs around $136, although AAPL has given up those gains and fallen around 1.5% as of the US cash open this morning. Apple's results were a parade of superlatives: profits rose more than 30% y/y, it sold 61.2 million iPhones, up 40% from the year-ago period, saw a 72% gain in the number of iPhones sold in China. Apple's cash pile rose to a record $193.5 billion (up from $178 billion last quarter), and the board expanded its share repurchase authorization to $140 billion and boosted the dividend 11% to $0.52/shr.

Drug giant Merck is another big gainer this morning, with shares up 5%, after beating top- and bottom-line expectations and raising FY guidance. Aetna has added 2.4% thanks to decent profits and higher FY guidance. UPS rose more than 3% despite missing revenue targets as net income saw healthy gains and package volume growth continued at a healthy rate. Whirlpool is a notable decliner, down 8% after missing expectations across the board and cutting its FY outlook. Corning has given up its nearly 5% gain in the premarket as investors dissect a very mixed quarter. Valero was the first major refiner to disclose first quarter numbers, with revenue crushing expectations but profits good but not great. Shares of VLO were flat on the session.

Looking Ahead

- 16:30 (US) Weekly API Oil Inventories
- 17:00 (KR) South Korea May Business Manufacturing Survey: No est v 80 prior; Non-Manufacturing Survey: No est v 74 prior
- 18:45 (NZ) New Zealand Mar Trade Balance: 300Me v 50M prior
- 23:00 (TH) Thailand to sell THB7.0B in 2061 Bonds