A volatile day finished higher as stocks rallied 0.6%. Stocks were strong out of the gate as the rally overseas expanded and investors cheered the jobless claims and ISM data. As the day wore on investors sold into the news and took the markets close to negative in afternoon trade. The market found its footing and managed to rally into the close.
The weak dollar sent commodities rallying sharply higher as oil rallied 1.5% and copper prices jumped 0.6%. The Euro was higher by 0.6% against the dollar. The Nasdaq was a big underperformer on the day as RIMM’s earnings dinged the sector. The beta trade has lost some of its luster as risky assets have substantially outperformed lower beta names over the last few weeks.
Tomorrow’s job’s report will be an odd one with the market closed and investors waiting to react until Monday. Today’s close is essentially a Friday and we all know what happens on Monday – 21 of the last 24 Monday’s have been higher so investors were eager to buy into the long weekend with what is anticipated to be a positive open on Monday.
Today’s breadth was strong at 2:1, but volume was once again very light. Daily Futures wraps up the action from other markets:
The U.S. Labor Department said that jobless claims were down 6,000 last week to 439,000, roughly as expected.
The Institute of Supply Management’s index of manufacturing increased from 56.5 to 59.6 in March, much stronger than expected and the highest score in almost six years.
Most U.S. markets are closed tomorrow for Good Friday, but some financial contracts will trade early to be available for the release of the monthly unemployment report. The June U.S. T-bonds finished down 7/32nds at 115.29/32nds.
The U.S. Census Bureau said that construction spending was at an annual rate of $846.2 billion in February, down 1.3% from January’s pace and down 12.8% from a year ago.
Grains and Cotton
The USDA said that, as of last week, 2009-2010 exports of:
Corn improved from up 7% to up 8% from a year ago.
Soybeans remained up 34% from a year ago.
Wheat remained down 21% from a year ago.
Cotton improved from down 19% to down 18% from a year ago.
May cotton closed up .95 at 81.50.
May corn ended down a half-cent at $3.445 after yesterday’s bearish response to the USDA’s planting estimates.
The USDA said that net sales of beef totaled 7,500 tons last week, down from 14,100 tons the previous week. June cattle were down .02 at 93.52.
June hogs closed up .47 at a new contract high of 83.37, still finding support from Friday’s bullish U.S. hog inventory report.
Statistics Canada said that lumber production was up 18.8% to 4.083 million cubic meters in January. May lumber ended down .20 at $287.00.
June crude oil closed up $1.16 at $85.34, matching its highest close in 17 months, in spite of yesterday’s 2.9 million barrel increase in the weekly inventory.
The U.S. Department of Energy said that underground supplies of natural gas were up 12 billion cubic feet last week to 1.638 trillion cubic feet. Supplies are now down 1% from a year ago. June natural gas closed up 21.2 cents from yesterday’s contract low and ended at $4.177.
May copper closed up 3.05 cents at $3.5840, the highest close in 20 months, helped by today’s positive manufacturing news. June gold closed up $11.60 at $1,126.10.
An index of manufacturing in the U.K. increased from 56.5 to 57.2 in March, better than expected and the highest reading in over 15 years. The June British pound closed up .0090 at $1.5264.
An index of manufacturing in the Euro area increased from 54.2 to 56.6 in March, better than expected and the best since November of 2006.
The Bank of Japan said that its Tankan sentiment index of large manufacturers increased from -25 to -14 in March, the least pessimistic score since 2008. The June yen closed down .0041 at 1.0662, the lowest in seven months.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.