MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 17776.12 -200.19 -1.11%
Nasdaq 4900.88 -46.56 -0.94%
S&P 500 2067.89 -18.35 -0.88%
Japan: Nikkei 225 19206.99 -204.41 -1.05%
Hang Seng 24900.89 45.77 0.18%
Shanghai Composite 3747.9 -38.67 -1.02%
S&P BSE Sensex 27957.49 -18.37 -0.07%
Australia: S&P/ASX 5891.5 45.4 0.78%
UK: FTSE 100 6773.04 -118.39 -1.72%
PRICE CHG YIELD
U.S. 2 Year 1/32 0.563
U.S. 5 Year 5/32 1.372
U.S. 10 Year 6/32 1.925
Australia 10 Year 12/32 2.328
China 10 Year -21/32 3.7
India 10 Year 1/32 7.734
Japan 10 Year -10/32 0.404
German 10 Year 9/32 0.155
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7606 -0.0001
Yen (USD/JPY) 120.13 0
S. Korean Won (USD/KRW) 1109.17 0.18
Chinese Yuan (USD/CNY) 6.2 -0.0025
Euro (EUR/USD) 1.0734 -0.0001
WSJ Dollar Index 87.94 0
LAST CHANGE % CHG
Crude Oil 47.84 -0.84 -1.73%
Brent Crude 56.42 -0.86 -1.50%
Gold 1183.4 -1.9 -0.16%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stocks fell Tuesday, dragging the Dow Jones Industrial Average into the red for the first quarter, as oil prices slipped and the dollar strengthened. U.S. government bonds rose to cap the fifth quarterly gain in a row, the longest winning streak in more than a decade. Gold prices turned lower, with investors hesitant to make major moves ahead of key U.S. data at the end of the week.
OPENING CALL:
Wednesday brings the release of the China Federation of Logistics and Purchasing March PMI and the country's Markit Economics/HSBC end-March manufacturing PMI.
China's is the economy that's arguably provoking the most worry right now. It's still mostly growing faster than anywhere else, but the extent of the slowdown in the world's second-largest economy seems to be consistently exceeding expectations. The mid-month PMI from HSBC, which covers mostly medium-sized private companies, offered an important reason for that interpretation. Now, we have a chance to see how the larger, state-owned sector is doing.
EQUITIES:
U.S. stocks fell, dragging the Dow Jones Industrial Average into the red for the first quarter.
It marks the first quarterly decline for the index since the first quarter of 2014. The S&P 500 and the Nasdaq Composite, however, rose for the ninth consecutive quarter.
It has been a bumpy road for equities in the past three months as investors grappled with concerns about the pace of global growth, the sharp fall in the price of oil, the question of when the Federal Reserve will begin to raise interest rates as well as the strengthening dollar.
The Dow had the most swings of at least 1% in a quarter since the fourth quarter of 2011. The choppy trade has occurred even as volumes were below-average, traders said.
That trend continued on Tuesday, as the Dow Jones Industrial Average fell 200.19 points, or 1.1%, to 17776.12, its ninth day during the quarter with a loss of at least 1%, the most such days since second quarter of 2012. The S&P 500 shed 18.35 points, or 0.9%, to 2067.89, and the Nasdaq Composite declined 46.56 points, or 0.9%, to 4900.88.
"The market continues to bounce in its range," said Brett Mock, managing director at brokerage JonesTrading Institutional Services. "Whether it's the jobs report this Friday or we have to wait for first-quarter earnings in a couple of weeks, it's wait and see."
In corporate news, Charter Communications shares jumped 5.3% after it agreed to acquire Bright House Networks for $10.4 billion, the latest deal in a rapidly consolidating pay-television industry.
Asian stocks ended in mixed fashion Tuesday, as the positive mood from the prior-day's Shanghai-led rally induced both profit-taking and stoked further enthusiasm among investors.
FOREX:
The euro suffered its largest quarterly decline against the dollar in its history, dropping 11% over the first three months of the year as investors have focused on the diverging outlooks for the U.S. and Europe.
Investors have piled into the dollar as the U.S. economy has gathered momentum and the Federal Reserve is talking about raising interest rates for the first time in nearly nine years. At the same time, Europe has been struggling with slowing growth.
On Tuesday, the dollar strengthened against the euro and most rival currencies as investors bet U.S. employment data later this week would lay the groundwork for higher interest rates. The euro shed 0.7% to $1.0754 in late-afternoon trade, falling to its weakest level since March 20. The Wall Street Journal Dollar Index, which compares the greenback against a basket of 16 currencies, rose 0.3% to 87.85, its fourth consecutive session of gains.
Investors are looking for the coming employment numbers, particularly the U.S. jobs report for March on Friday. Economists surveyed by The Wall Street Journal predict that nonfarm payrolls grew by 248,000 new jobs in March, although the hourly wage likely increased only 0.2%. The Fed has said it wants to see strong improvement in wages before it raises interest rates.
"The dollar should largely move within a tight trading range until Friday," said Sireen Harajli, foreign exchange strategist at Mizuho Bank. "A strong or weak surprise in the jobs number would give the market more of an indication on what the Fed would do."
BONDS:
U.S. government bonds rose to cap the fifth quarterly gain in a row, the longest winning streak in more than a decade.
The $12.5 trillion market continues to lure investors left uncertain by uneven global growth and subdued inflation in the developed world. Mixed economic readings in the U.S. during a harsh winter have bolstered investors' expectations that the Federal Reserve will maintain an accommodative monetary policy, which tends to benefit bond prices.
Treasurys also offer higher yields than comparable debt elsewhere in the developed world, another reason investors have kept piling in.
"The yield differential between the U.S. and the rest of the world continues to drive foreign buyers into Treasury bonds," said Thomas Roth, executive director in the U.S. government bond trading group at Mitsubishi UFJ Securities (USA) in New York. "Domestic investors [have] become convinced by Federal Reserve officials that these low yields are here to stay."
In late afternoon trading, the yield on the benchmark 10-year Treasury note was 1.930%, down from 1.959% on Monday. Yields fall when bond prices rise.
COMMODITIES:
Oil prices fell as a deal on Iran's nuclear program appeared more likely, raising the chances of increased Iranian crude-oil exports.
Tuesday was the deadline for Iran and six other nations to outline the main elements of a deal constraining Iran's nuclear program in exchange for lifting international sanctions. The U.S. State Department said the parties made enough progress to merit staying at the talks until Wednesday. The deadline for a final agreement is the end of June.
Iran, which has 10% of the world's crude-oil reserves, has seen its production and export capacity sharply curtailed by sanctions. Its crude exports dropped from 2.5 million barrels a day in 2011 to 1.1 million barrels a day in 2013, according to the U.S. Energy Information Administration.
Market watchers say additional oil supplies from Iran would flood an already-oversupplied market and push prices even lower. Oil prices have dropped more than 50% from their mid-June high due to growing production and lackluster demand.
"Negotiations are moving forward--a deal is going to happen," said Bill O'Grady, chief market strategist at Confluence Investment Management, which oversees $3.2 billion. "These are barrels...have to be accounted for. They may not be coming today or the next day, but they will be coming."
Light, sweet crude for May delivery settled down $1.08, or 2.2%, at $47.60 a barrel on the New York Mercantile Exchange. Prices fell 4.3% on the month and 11% in the quarter.
Brent, the global benchmark, slid $1.18, or 2.1%, to $55.11 a barrel on ICE Futures Europe. Prices posted a 12% monthly loss and 3.9% quarterly loss.
Gold prices turned lower, with investors hesitant to make major moves ahead of key U.S. data at the end of the week.
TODAY'S HEADLINES:
Lew Criticizes China for Delaying Plans to Open Up Economy
U.S. Treasury Secretary Jacob Lew Tuesday warned against China's delaying plans to open its economy to international markets amid a slowdown in the country's growth prospects.
Taiwan Says It Will Seek To Join China-Led Bank
Taiwan said it would opt in and Japan stayed on the sidelines as the deadline approached to join a new China-led development bank -- even as Taiwanese officials signaled Taipei would set conditions on its membership status, a move that could complicate any final agreement.
China to Begin Deposit Insurance From May
China detailed a plan to launch a bank deposit-insurance system in May, a long-awaited move that is aimed at better disciplining its lenders and their customers.
Valuation Rises for Chinese Taxi-Hailing App
U.S. hedge funds are jumping onboard China's dominant taxi-hailing app business, putting an $8.75 billion valuation on the Chinese startup. Coatue Management is leading a consortium of investors buying about $600 million worth of shares in the combined Didi Dache-Kuaidi Dache business.
Singapore Air Seeks Stake in Hong Kong Airlines
(MORE TO FOLLOW) Dow Jones Newswires
March 31, 2015 17:30 ET (21:30 GMT)
Singapore Airlines is in talks to buy a minority stake in Hong Kong-based short-haul carrier Hong Kong Airlines International Holdings, as part of an effort to tap into China's booming travel market, people with direct knowledge of the deal said.
Iran Talks to Miss Deadline as Issues Remain
Nuclear talks with Iran appeared set to crash through another deadline with U.S. officials saying several difficult issues still need resolving to seal the outlines of a final nuclear accord.
Charter to Buy Bright House Networks
Charter Communications agreed to buy cable operator Bright House Networks for $10.4 billion in cash and stock, the latest deal in a rapidly consolidating pay-television industry.
Home Price Growth Moderates in Early 2015
Home values around the U.S. are growing at a rate far slower than was seen a year ago, a welcome trend for affordability that could be offset by headwinds like stagnant wages and potentially rising mortgage rates.
Lacker Says 'Strong Case' for June Rate Increase
Federal Reserve Bank of Richmond President Jeffrey Lacker said there is a "strong case" for the Fed to begin raising short-term interest rates at its June policy meeting.
Iraq Says Forces Recapture Tikrit From ISIS
Iraq's prime minister said that security forces have recaptured the strategic city of Tikrit after a monthlong battle. However, U.S. military officials said they were unable to confirm the assertion and expressed skepticism that the fight for the Sunni city was all but over.
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TODAY'S CALENDAR
(Times in GMT, followed by country and event)
2230 AUS Mar Australian PMI
2300 NZ Mar QV Nationwide Residential Property Values
2300 SKA Mar CPI
2350 JPN Q1 Tankan Survey of Enterprises in Japan
0000 SKA Mar HSBC South Korea Manufacturing PMI
0000 SKA Mar Trade data
0030 AUS Feb Building Approvals
0100 CHN Mar CFLP China Manufacturing Purchasing Managers' Index (PMI)
0135 JPN Mar Japan Manufacturing PMI
0145 CHN Mar HSBC China Manufacturing PMI
0200 VIE Mar Vietnam Manufacturing PMI
0200 TAI Mar CIER PMI
0200 TAI Mar Taiwan Manufacturing PMI
0300 INA Mar Indonesia Manufacturing PMI
0400 INA Mar CPI
0500 JPN Mar Auto sales
0530 AUS Mar Commodity Price Index
0700 EU ECB Governing Council non-monetary policy meeting
0745 ITA Mar Italy Manufacturing PMI
0750 FRA Mar France Manufacturing PMI
0755 GER Mar Germany Manufacturing PMI
0800 EU Mar Eurozone Manufacturing PMI
0830 UK Mar CIPS / Markit Manufacturing PMI
0830 UK Mar Narrow money (Notes & Coin) and reserve balances
1100 US 03/27 MBA Weekly Mortgage Applications Survey
1215 US Mar ADP National Employment Report
1330 CAN Mar Canada Manufacturing PMI
1345 US Mar US Manufacturing PMI
1400 US Feb Construction Spending - Construction Put in Place
1400 US Mar Online Help Wanted Index
1400 US Mar ISM Manufacturing Report on Business
1430 US 03/27 EIA Weekly Petroleum Status Report
1500 US Mar Global Manufacturing PMI
2000 US Mar Domestic Auto Industry Sales
2350 JPN Mar Monetary Base
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(END) Dow Jones Newswires
March 31, 2015 17:30 ET (21:30 GMT)
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