U.S. Markets Rebound, Real Treasury Yields Turn Negative

Bikram Pandey
16 Apr, 2012
New York City

U.S. stocks rebounded after retail sales were ahead of expectations in March. Treasury yields turned negative after adjusting for inflation. World Bank appointed another American as a head following the tradition of seventy years over objections from fast developing nations.

[R]4:00 PM New York – U.S. stocks rebounded after retail sales were ahead of expectations in March. Treasury yields turned negative after adjusting for inflation. World Bank appointed another American as a head following the tradition of seventy years over objections from fast developing nations.[/R]

U.S. indexes traded higher after the largest weekly drop in the year last week after retail sales rose more than estimated in March. However, U.S. Treasury bond yield turned negative on inflation adjusted basis as bond market rally depress yields to a historic low.

Market sentiment was positive in trading after the release of stronger than expected retail sales data even after adjusting for positive auto sales but home builder confidence declined in April.

In corporate news, Goldman Sachs agreed to sell ICBC stake to Temasek for $2.3 billion. Stratasys and Objet agreed to merge in a $1.4 billion all-stock transaction.

On the earnings front, Citigroup first quarter net dropped 2% to $2.9 billion but improving economic outlook helped revenues by 2%. Gannett first quarter net declined 24.6% on advertising revenues. M&T Bank first quarter net fell to $206.5 million. Mattel net tumbled 53%. Stratasys soar on first quarter outlook.

The European indexes pared gains as investors focused on the rising bond yields and the euro declined for the third day in a row.

France based GDF acquired remaining 30% stake in the UK based International Power for £6.4 billion. Germany based consumer products maker Henkel rose after reiterating fiscal 2012 growth outlook.

The UK indexes fell after home prices rose to record levels in April and mortgage lending climbed in February. Stocks were volatile after Spanish bond yields and credit default rose to a new high for the year.

Euro area trade balance swung to a surplus, employment in the German manufacturing sector and Italian exports increased in February. Danish output prices climbed and Norwegian trade surplus rose to a record high in March.

The benchmark Nikkie index plunged the most in last two weeks as international worries dominated trading sentiment. Investors focused on the record Spanish bond yields and Korea lowered its growth estimate in the current year.

Australian stocks fell after business lending declined for the fourth month in a row in February. Whitehaven Coal completed the purchase of Aston Resources. Linc Energy announced a joint venture to explore natural gas in China.

Commodities, Bonds and Currencies

The yields on 10-year U.S. bond decreased to 1.97% and 30-year U.S. bond edged lower to 3.11%.

The U.S. dollar edged lower to $1.31 to one euro and inched lower against the Japanese yen to 80.48 yen.

Immediate delivery futures of Texas crude oil increased 21 cents to $103.04 a barrel and Brent crude futures fell $2.68 to $118.56.

In New York trading, futures of natural gas increased 0.04 cents to $2.18 per mbtu and traded near a decade low and gasoline price declined 8.06 cents to 326.30 cents a gallon.

In metals trading, copper rose 0.20 cent to $3.63 per pound, gold declined $8.20 to $1,652.10 per ounce and silver increased 9 cents to $31.48.