Fixed Income Market Overview
The key 10-year U.S. Treasury yield rose modestly on Tuesday, reflecting investor deliberation over recent economic indicators and Federal Reserve commentary. Marking a level not seen since mid-November 2023, the yield climbed to 4.657%, while the 2-year Treasury yield edged up slightly to 4.964%. These movements, inversely related to bond prices, underscored market assessment of future interest rate trajectories amidst robust retail sales figures for March, outperforming economist forecasts and indicating ongoing consumer spending resilience amid persistent inflation pressures.
In parallel, European Central Bank President Christine Lagarde reiterated the institution’s inclination towards imminent rate reductions, contingent upon prevailing economic conditions and potential external shocks. Lagarde cited ongoing monitoring of oil prices amid geopolitical tensions, particularly following Iran’s recent military actions against Israel. The ECB’s stance, reinforced by indications of a potential June rate cut, reflects a proactive response to subdued inflationary pressures, with policy adjustments poised to align with evolving economic data and global developments.
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China’s economy grew 5.3% in the first quarter, beating expectations.
Major Indicies
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DJIA | 37,798.97 | 63.86 | 0.17%↑ |
| NASDAQ | 17,713.66 | 6.83 | 0.04%↑ |
| SNP 500 | 5,051.41 | -10.41 | -0.21%↓ |
| NIKKEI | 38,471.20 | -761.60 | -1.94%↓ |
| HIS | 16,248.97 | -351.49 | -2.12%↓ |
| VIX | 18.40 | -0.83 | -4.32%↓ |
Bonds
| Name | Yeild | CHG |
|---|---|---|
| US 10-YR | 4.67% | 0.06 |
| US 30-YR | 4.77% | 0.04 |
| US 5-YR | 4.71% | 0.08 |
| JPN 10-YR | 0.87% | 0.01 |
| UK 10-YR | 4.30% | 0.06 |
Futures & Commodities
| Name | Last | Change | %Change |
|---|---|---|---|
| WTI CRUDE | 85.36 | -0.05 | -0.06%↓ |
| NAT GAS | 1.732 | 0.041 | 2.42%↑ |
| GOLD | 2,407.80 | 24.80 | 1.04%↑ |
| SILVER | 28.38 | -0.34 | -1.19%↓ |
| COPPER | 4.304 | -0.075 | -1.72%↓ |
Equity Market Overview
Bank of America
Bank of America’s first-quarter profits fell by almost 20%, reaching $6.7 billion compared to $8.2 billion a year earlier, due to losses on office loans and credit cards. Revenues slightly declined to just under $26 billion, with $1.5 billion in loans written off, including $500 million from the struggling office market. Consumer loan losses, notably on credit cards, more than doubled to $1 billion year-overyear. The bank faced additional costs related to last year’s regional banking crisis. However, a rebound in deal making boosted investment banking revenues by 35%, exceeding expectations, while the Wall Street sales and trading businesses had their best start in over a decade. CEO Brian Moynihan emphasized strong earnings and expense management, positioning the company for continued market-leading performance.
UnitedHealth
United Health Group expects the Change Healthcare hack to cost up to $1.6 billion this year but maintains its 2024 earnings forecast, easing Wall Street concerns. Despite disruptions, first-quarter earnings beat estimates, boosting shares by 7.5%. The hack disrupted payments to healthcare facilities nationwide, with delays in claim submissions. United Health relaxed some prior authorization processes but reinstated them recently. The company has already booked $872 million in costs related to the breach and expects disruptions to impact profit by $1.15 to $1.35
per share this year. Despite challenges, industry investors find relief in management’s expectations aligning with medical care trends.
Morgan Stanley
Morgan Stanley’s first-quarter profits surged 14%, reaching $3.4 billion, outpacing analysts’ estimates, driven by a robust performance in investment banking, trading, and wealth management. The wealth management division, overseen by new CEO Ted Pick, exceeded expectations by attracting around $95 billion in net new assets, pushing the firm’s total client assets to $7 trillion. Despite a pre-tax profit margin below its target, the wealth business maintained steady profits, with a significant portion of new assets coming from ultra-wealthy clients. Revenues from equities trading rose 4%, while investment banking fees increased by 16%, although the recovery was less pronounced compared to peers.
