– The Dow closed at a new high last night even though GDP printed incredibly weak and the Fed continued its taper. The GDP data was at best anaemic and at worst downright sickly, showing annualised growth of just 0.1% which means that growth in the quarter was just 0.025% given the way the US annualises this data. The Fed pared another $10 billion from its monthly purchases which now sit at a still robust $45 billion.
– Perhaps the market focused on the strong ADP employment data which rose 220,000, providing a solid lead for non-farm payrolls tomorrow. Equally strong was the rebound in the Chicago PMI which bounced from 56.7 to 63. Perhaps it was the growth in personal consumption in the quarter of 1.3% and the FOMC’s comment that “household spending appears to be rising more quickly”.
– In the end, the Dow closed up 46 points or 0.28% to 16,581, the Nasdaq rose 0.28% to 4,115 and the S&P 500 rose 6 points for a gain of 0.3% to 1,884.
– This has left the Australian market poised to open higher again with the Futures market showing the SPI 200 June futures up 17 points to 5486. We’ll see how it goes on the day though.
– In Europe, stocks were mixed after mixed data with German retail sales down 0.7% in March and unemployment falling 25,000. EU CPI was just 0.7% in April – slightly lower than the 0.8% expected. The FTSE closed up 0.15% to 6,780, the DAX rose 0.2% to 9,603 while the CAC fell 0.24% to 4,487. In Milan and Madrid, stocks fell 0.88% and 0.02% respectively.
– In Asia yesterday, the BoJ kept rates and its QE program as they are and declared it sees itself on track for 2% inflation in Japan. Stocks were mixed though, with the Asia Dow down 0.46%, the Nikkei up just 0.11% but it could come under pressure in trade today from the stronger Yen overnight after the US GDP data. In China the Shanghai exchange fell 0.28%. Today all eyes will be on the NBS Manufacturing PMI in China.
– On Currency markets, the euro rallied hard and is back near 1.39 sitting at 1.3865 this morning. The pound is at 1.6870 nd USDJPY is back at 102.20. The Aussie rallied up toward 93 cents then found the going tough again but sits this morning at 0.9285.
– On Commodity markets, Nymex crude dipped under $100 Bbl sitting at $99.69, Gold is at $1292 oz and Copper fell further to $3.02. On the Ags, Corn fell 0.34% while Wheat and Soybeans rose 0.71% and 0.44% respectively.
– Data today sees the AiG performance of manufacturing index released along with export and import price indices and then the Chinese NBS PMI later today. There are a raft of European nations out for May Day tonight. In the US, the key data release is the ISM manufacturing PMI but we also get the Markit version (in the UK as well) along with jobless claims and consumption data.
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