FLASH: The S&P 500 gaped open after better than expected China’s Manufacturing PMI (actual 50.5; expected 49.5; prior 49.2) and Non-Manufacturing PMI (actual 54.8; expected 54.5; prior 54.3) reinforced the idea that global economic activity is rebounding.
The upbeat tone drove a rally in stocks with high-beta groups like the Dow Jones Transportation Average (+2.3%) and the PHLX Semiconductor Index (+2.5%) pacing the advance. The Dow Jones Transportation Average jumped above its 200-Day MA (10504) and approached its February high amid gains in all 20 components.
The broader industrials sector gained 2.1%, but finished behind financials (+2.4%).
The economically-sensitive group benefited from weakness in US Treasuries, which sent the 10-yr yield higher by 8 bpts to 2.50%. This helped expand the spread between the 3-month T-Bill yield and the 10-yr T-Note yield to 11 bpts from 3 bpts at the end of Friday’s session. Steepening the yield curve, no recession in sight.
Yield Check: 2-yr +5 bpts at 2.32% 3-yr +7 bpts at 2.28% 5-yr +6 bpts at 2.30% 10-yr +9 bpts at 2.50% 30-yr+3 bpts at 2.85%
Monday, the major US stock market indexes finished at: DJIA +329.74 at 26258.42, NAS Comp +99.59 at 7828.90, S&P 500+32.79 at 2867.19
Volume: Trade on the NYSE came in at 837-M/shares exchanged
- NAS Comp +18.0% YTD
- Russell 2000 +15.4% YTD
- S&P 500 +14.4% YTD
- DJIA +12.6% YTD
HeffX-LTN’s overall technical outlook for the US major stock market indexes is Bullish in here.
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