It’s raining in Seattle again which means that baseball season has begun and the Mariners are off to a soggy start. Stocks continue to trade in a tight range as the rally appears to have stalled for now. Three big banks will be report earnings tomorrow those being Wells, Citi and JP Morgan/Chase. Geopolitical tensions are elevated adding drama to a full plate for investors. At the Close the Dow lost about 59 points on flat volume to close at 20,591.
Interest rates recently have been falling reflecting a move by investors into safe haven assets. While the Federal Reserve has pushed the Fed Funds rate higher the yield on the 10 year US Treasury initially hit the 2.6% mark in December and then again early in March but since then has fallen to the 2.287% level. While the current slope of the curve indicates growth, the recent falling 10 and 30 year yields, should it persist, will produce a flatter yield curve which tends to forecast slower economic growth. The falling US treasury yield takes pressure off the HY bond markets allowing them to possibly rally in the future.
Delta Airlines reported earnings and the company edged past estimates. While posting a 42% decline in earnings and a 1% drop in revenues, Delta cited higher fuel prices pressuring margins but looking ahead it expects passenger revenue to increase 1% to 2% on flat system capacity. Shares were higher on the news.
Steel stocks in the US fell hard today after a plunge in iron ore prices. Iron ore has fallen almost 20% since February as rising production from mines around the globe, tighter credit for Chinese steel makers, steel tariffs in the US and Europe against China and now a possible delay of US infrastructure spending roils global steel and iron ore markets.