Equities Shake Off Earlier Weakness; Nasdaq Near All-Time Highs

Economic Data

- (IE) Ireland Mar PPI M/M: 3.4% v 0.9% prior; Y/Y: 9.5% v 5.2% prior
- (RU) Russia Gold and Forex Reserve w/e Apr 17th: $350.5B v $354.1B prior
- (US) Initial Jobless Claims: 295K v 287Ke; Continuing Claims: 2.325M v 2.29Me
- (MX) Mexico Feb IGAE Economic Activity Index (Monthly GDP) Y/Y: 2.3% v 2.4%e
- (US) Markit Apr Preliminary Manufacturing PMI: 54.2 v 55.7e
- (US) Mar New Home Sales: 481K v 515Ke
- (US) Weekly EIA Natural Gas Inventories: +90 bcf vs. +86 to +90 bcf expected range

Weak PMI reports out of Europe, disappointing March new home sales numbers and caution ahead of the Eurogroup meeting on Friday limited equities earlier today. But after Europe closed, with the CAC and DAX near session lows, things have improved a bit. Note that the Nasdaq is testing all-time highs this morning. Big gains in energy names on rising crude prices are leading things higher. As of writing, the DJIA is up 0.16%, the S&P500 is flat and the Nasdaq is up 0.23%.

Unlike the big improvement in yesterday's March existing home sales, today's March new home sales data was disappointing. Existing home sales had bounced higher off the weather-impacted February numbers, but the March new home sales declined more than 10% from February's total. Analysts highlight that the series is highly erratic and subject to big revisions, but the XHB is off 1.5% in any case. A more significant factor for housing names this morning is Pulte Homes, which widely missed earnings and revenue targets, with performance weighed down with construction delays. PHM is off more than 8%, while other major homebuilders are down 3-4%. In other data, Markit's preliminary PMI index for April fell to 54.2 in April from 55.7 in March.

There has been a raft of dicey Greece headlines heading into Eurogroup meeting on Friday. A Greek official claimed a deal was very close and that no "plan B" was under discussion. One notable report suggested that a potential deal may involve Greece requesting that the ESM facility be used to buy Greek government bonds held by the ECB, with the resulting proceeds used to pay for debt redemptions over the summer. But more ominously, Greece's creditors were said to be considering a "final ultimatum" if Greece further delays work on a deal. EUR/USD dipped to 1.0665 during European trading, then turned around and retook 1.0810 mid-morning.

Caterpillar gained more than 2.5% on a fantastic earnings result in its first quarter, but shares of CAT have given up all their gains and dropped into the red mid-morning. General Motors meanwhile widely missed on earnings and revenue, and saw shares dip 4%.

Dow Chemical saw its earnings bulked up by asset sales, even as its revenue declined 14% y/y, leaving DOW unchanged on the session. Competitor 3M missed earnings expectations and cut its FY guidance. Both names warned FX negative impacts on sales would be substantial for the full year.

Steel firms Nucor and Reliance Steel disclosed very strong first quarter results, with both companies widely beating earnings expectations. Both first cited improving industry conditions, although pricing remains under pressure. NUE is up more than 9%, while RS is only up 1.5%.

Airlines United Continental and Southwest reported very good results, citing lower fuel prices and growing demand. Southwest said the strong booking trends have continued so far in April. UAL is in the red, while LUV is up 2.5% or so. Consumer names Pepsi and Procter & Gamble are both off 2% or so. Both names saw flat profits and declining revenues; PG's revenue fell for the fifth quarter in a row.

Facebook recouped all its post-market losses heading into the open of cash trading this morning, and then gave up the gains. The firm's results were very good across the board, but perhaps not enough for some. Qualcomm is not improving after yesterday's FY15 guidance cut, with shares still down more than 2%.

Looking Ahead

- 13:00 (US) Treasury to sell $18B in 5-Year TIPS
- 17:00 (KR) South Korea Apr Consumer Confidence: No est v 101 prior
- 23:00 (TH) Thailand Central Bank (BoT) to sell THB35B in 2018 FRN
- (AR) Argentina Apr Consumer Confidence Index: No est v 52.6 prior
- (BR) Brazil Apr CNI Industrial Confidence: No est v 37.5 prior