U.S. JOLTS Job Openings at 7.14M vs expected 6.90M. Industrial Production m/m at 0.3% vs expected 0.2%. Treasuries barely moved, subduing current fears of rising interest rates for now. The Fed-sensitive 2-yr yield added one basis point to 2.86%, while the benchmark 10-yr yield declined one basis point to 3.16%. Risk-appetite returned on Tuesday as upbeat earnings buoyed sentiment. USDJPY up 0.50%, $112.34.
German ZEW Economic Sentiment at -24.7 vs expected -12.3. E.U. ZEW Economic Sentiment at -19.4 vs expected -9.2. Euro down -0.03%, $1.1576.
U.K. Average Earnings Index 3m/y at 2.7% vs expected 2.6%. Unemployment Rate inline at 4.0%. In Brexit, Germany’s Europe Minister Roth, said that they are close to a Brexit deal, but added that they shouldn’t rule out the chance of a no-deal. Irish PM Varadkar also made headlines, saying that there will be no withdrawal agreement without a legally binding backstop, while EU’s Chief Negotiator Barnier later said that the Irish border issue remains unsolved and that they may need more time to reach an agreement. Sterling held on to gains despite EU’s Tusk later comments that a no-deal is more likely than ever before. Sterling up 0.27%, $1.3188.
Chinese CPI y/y inline at 2.5%. USDCAD down -0.43%, $1.2936. N.Z. CPI q/q at 0.9% vs expected 0.7%. Kiwi up 0.49%, $0.6583.
S&P 500 up 2.15%, 2,809.92. Nasdaq up 2.94%, 7,276.43. Nikkei up 1.25%, 22,549.24.
Investor sentiment was buoyed after several financial and health care giants reported upbeat earnings. Goldman Sachs (GS 221.70, +6.48, +3.0%) and Morgan Stanley (MS 45.94, +2.47, +5.7%) helped boost the financial sector (+1.6%) after reporting better-than-expected top and bottom lines. Asset management firm BlackRock (BLK 408.00, -18.94, -4.4%) weighed on the sector, though, after missing revenue expectations. BlackRock’s pain worsened when CEO Larry Fink said that the company saw more than $30 billion of institutional non-ETF index equity outflows that were driven by client de-risking. Fink added that he thinks clients will continue to de-risk.
Health care sector (+2.9%) components Johnson & Johnson (JNJ 136.56, +2.61, +2.0%) and UnitedHealth (UNH 272.57, +12.32, +4.7%) contributed to the group’s strong performance after better-than expected results. The health care sector is the second-best performing group this year with a 2018 gain of 12.5%; tech leads with a gain of 13.9%. Adobe Systems (ADBE 260.67, +22.66, +9.5%) had a very strong performance after it reaffirmed fourth quarter guidance and said it expects FY19 revenues to be up 20%. Likewise, chip stocks outperformed, as the Philadelphia Semiconductor Index climbed 3.3%. Notable gainers included Intel (INTC 45.94, +1.41, +3.2%), Qualcomm (QCOM 66.12, +1.95, +3.0%), and NVIDIA (NVDA 245.83, +10.45, +4.4%).
