Equities Hovering Around All-Time Highs

Economic Data

- (IE) Ireland Jan Property Prices M/M: -1.4% v +0.4% prior; Y/Y: 15.5 v 16.3% prior
- (BR) Brazil Feb FGV Consumer Confidence: 85.4 v 89.8 prior
- (US) MBA Mortgage Applications w/e Feb 20th: -3.5% v -13.2% prior
- (BR) Brazil Jan Total Outstanding Loans (BRL): 3.013T v 3.022T prior; M/M: -0.2% v +2.0% prior
- (BR) Brazil Feb CNI Consumer Confidence: 100 v 104.2 prior
- (US) Jan New Home Sales: 481K v 470Ke
- (MX) Mexico Q4 Current Account Balance: -$5.31B v -$7.0Be
- (US) DOE Crude: +8.43M v +4.5Me; Gasoline: -3.12M v -1Me; Distillate: -2.71M v -3.5Me;

Both the DJIA and the S&P500 closed at fresh all-time highs yesterday and this morning the indices are hovering around the same levels. Fed Chair Yellen largely reiterated her comments from yesterday and has strongly defended the Fed's need for independence in policy making. Meanwhile, the 10-year UST yield is back below 2%, around 1.990% as of writing. The DJIA and S&P500 are basically flat, while the Nasdaq is up 0.10%.

January new home sales were little changed from the six-year high seen in the December data, providing as stark contrast to the disappointing January existing home sales report on Monday. Note that sales in the Northeast plunged 51.6% to record-low 15K annual rate as record cold and snowfall impeded the market. The median sales price was up 9% y/y. After yesterday's gains on Toll Brothers' earnings and the lagging S&P/CS December home prices data, the homebuilders are seeing skimpy gains and a few negative prints.

Press reports suggest that while European figures have provisionally accepted Greece's concessions, they're not very satisfied with Athens's very vague commitments. The FT reported that the IMF and the ECB questioned how much the commitments adhere to Greek's former promises. Note that Germany's Bundestag has to approve the bailout extension before its expiration on Saturday, and this skepticism may influence them.

Meanwhile a new front in Europe's fiscal woes is coming to the fore now that Greece has kicked the can forward a few months. France is looking to delay its target for bringing the budget deficit below 3% of GDP by three years until 2018, and the EU Commission is only giving it until 2017, and is calling for more structural deficit reductions. Separately, Germany has sold €3.28 billion in five-year bonds with a negative yield for the first time in its history, just days before the ECB QE program begins; the German 10-year yield is near record lows at 0.322%. EUR/USD is trading in the higher end of the 1.1300 handle this morning.

Major retail names are volatile after earnings reports. TJX met expectations in its fourth-quarter report, hiked the dividend and topped up its share buyback. Shares were down more than 2% in the premarket but have recovered the losses and headed higher. Target's fourth-quarter numbers were satisfactory but its first-quarter guidance was a bit soft. Shares of TGT gained in the premarket but are at their lows down 1% as of writing. Share of Hewlett-Packard are heading even lower in cash trading, with HPQ down 10% after the firm cut its FY outlook yesterday and disclosed some ugly fourth-quarter revenue declines. 

Looking Ahead

- 12:00 (FR) France Jan Net Change in Jobseekers: +8.0Ke v +8.1K prior; Total Jobseekers: 3.503Me v 3.496M prior
- 13:00 (US) Treasury to sell $35B in 5-Year Notes
- 16:45 (NZ) New Zealand Jan Trade Balance (NZD: -158Me v -159M prior
- 19:30 (TW) Taiwan Jan Unemployment Rate: 3.8%e v 3.8% prior