Indexes remained stuck in the recent trading range as equities lacked momentum as investors worry how the slowing economic conditions may affect the pending tech giant’s earnings.   The reports Tuesday afternoon from MSFT and GOOG may well inspire to finally break this frustrating chop zone.  However, the question remains will it be a bullish or bearish inspiration? Plan for more chop as traders ponder the outcome with several market-moving economic reports tossed in for added uncertainty. 

Asian market primarily declined during the night as lackluster economic growth and geopolitical concerns weigh on investors’ minds.  European markets trade flat to slightly lower this morning as bond yields and pending earnings cloud the path forward.  U.S. futures also indicate a slightly bearish open as we wait to see if the big rally in the tech giants can be justified by the pending earnings.  Plan for some big price moves once the data is reviled but until then expect more choppy uncertain price action.

Economic Calendar

Earnings Calendar

Notable reports for Monday include AGNC, ARE, BOH, CDNS, CLF, CO, CR, FRC, PKG, PHG, PCH, RRC, WSBC, & WHR.

News & Technicals’

More and more countries are calling for trade to be carried out in other currencies besides the U.S. dollar. For instance, Brazil and Argentina have discussed the creation of a common currency for the two largest economies in South America. In a conference in Singapore in January, multiple former Southeast Asian officials spoke about de-dollarization efforts underway. The UAE and India are in talks to use rupees to trade non-oil commodities in a shift away from the dollar. Saudi Arabia said that the oil-rich nation is open to trading in currencies besides the U.S. dollar. However, it’s worth noting that despite these efforts, the U.S. dollar remains dominant in global forex reserves even though its share in central banks’ foreign exchange reserves has dropped from more than 70% in 1999.

Bed Bath & Beyond has filed for bankruptcy protection and has begun a “limited sale and marketing process for some or all of its assets”. The company’s 360 Bed Bath & Beyond and 120 buybuy BABY stores will remain open for the time being as it works to liquidate assets. The struggling home goods retailer has been warning of a potential bankruptcy since early January.

Swiss authorities brokered a controversial 3 billion Swiss franc deal over the course of a weekend in late March between UBS Group AG and Credit Suisse. The acquisition is expected to be consummated by the end of this year. However, the full absorption of Credit Suisse’s business into UBS Group is expected to take around three to four years.

On Friday, equities lacked momentum with the S&P 500 closing up about 0.1% and the Dow adding 22 points. The focus remained on incoming earnings results, as worries of slowing economic conditions and how that may affect the pending earnings of the tech giants. The bond market also saw modest moves on the day, with 10-year Treasury yields ticking slightly higher, remaining just below the 3.6% mark. The consumer staples, health care, and utility sectors were among the leaders of the day, while financials, technology, and commodity-related sectors were laggards.  Today could see more directionless chop as we wait for MSFT and GOOG reports Tuesday after the bell which may finally break the indexes from this frustrating trading range.

Trade Wisely,

Doug