U.S. stocks are in the red this afternoon, two sessions after the S&P 500 index registered a new all-time high.
They rallied following the release of better-than-expected new home sales data this morning, but failed to break above yesterday’s high, and have tumbled into negative territory over the past hour.
Treasuries are getting a boost following a solid auction of 5-year notes this afternoon. They were off to a good start before that, however, and equity indices across Europe closed down today as quickly unfolding developments in the Ukrainian political drama made headlines.
Right now, the S&P 500 is trading at 1843, down 0.1%. 10-year U.S. Treasury futures are up 0.2%, and the yield on the 10-year Treasury note is 2.67%, down four basis points from yesterday’s close. The German DAX and French CAC 40 were the worst performers in the euro zone, both down 0.4% on the day. The London FTSE 100 closed down 0.5%.
The release of monthly new home sales data at 10 AM ET revealed a 9.6% rise in new home sales in February, well above Wall Street’s consensus estimate of a 3.4% decline.
“This goes against the grain of housing softness in other reports, but the caution is that seasonal factors are big,” says David Ader, head of government bond strategy at CRT Capital.
“Still, it is what it is, and the [Treasury] market doesn’t seem to care too much.”
In Ukraine, there are reports of violence in the pro-Russian region of Crimea. This morning, Russian president Vladimir Putin put Russian combat troops on high alert for a drill, expressing concern for the safety of ethnic Russians in Ukraine.
The Ukrainian hryvnia is in freefall and weakness has spilled over into the Russian ruble as well.
But markets around the world are on edge.
“The current run up in all fixed income is being attributed to Russian President Putin’s orders for immediate combat readiness of troops in central and western Russia,” says Tom Tucci, head of U.S. Treasury trading at CIBC World Markets.
The charts below show moves in various markets. Across the top from left to right are the S&P 500, the U.S. dollar-Japanese yen exchange rate, and the euro-U.S. dollar exchange rate. Across the bottom are gold futures, 10-year U.S. Treasury futures, and December 2015 eurodollar futures.