In this sense, investors are closely watching new data releases for the next few weeks until the Fed’s June meeting, and Tuesday’s new-home sales data was “a supportive piece of evidence” for the probability of a rate hike, said Brad Friedlander, head portfolio manager of Angel Oak Capital Advisors.
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“The Fed is looking to raise rates”, said Justin Lederer, Treasury strategist at Cantor Fitzgerald in NY.
BANK ON IT: Bond prices fell. USA manufacturing output rose 0.3 percent in April, a sign that the country’s manufacturing sector was resisting the downward pull from sputtering global growth.
The primary credit rate, the interest rate on short-term loans offered to generally healthy banks through the Fed’s discount window, has been 1% since December 17. On the Nasdaq, 2,090 issues rose and 515 fell.
The two-year Treasury yield rose 2 basis points to 0.922 percent, reaching its highest level in two months.
“The market needs to be coddled and gently eased into a slightly higher interest-rate environment, and that appears to be what the Fed is doing”, said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. Beazer Homes USA added 50 cents, or 7 percent, to $7.71 and Lennar rose $1.91, or 4.3 percent, to $45.90. The deal would make the combined company the world’s largest producer of fertilizers and other agricultural products. The higher prices could mean more trouble for first-time buyers, since according to a new report from the Pew Institute, almost one-third of all millenials (ages 18-34) still live with their parents.
Spot gold (XAU=) fell to $1,242.63 an ounce, the lowest since April 28, in earlier trade, and was down 0.1 percent at $1,250.96 an ounce at 3:25 p.m. EDT (1925 GMT).
Stocks in China and Japan lost 0.7 per cent apiece, leading Asian markets down, though some investors were wary of chasing markets lower after their recent retreat.
ENERGY: Benchmark U.S. crude shed 32 cents to $47.76 per barrel in electronic trading on the New York Mercantile Exchange. South Korea’s Kospi edged down 0.9 percent.
Oil prices gained as investors anticipated a weekly drawdown in USA crude inventories that they hoped would boost prices closer to $50 a barrel. Hong Kong’s Hang Seng rose 0.1 percent to 19,830.43 while the Shanghai Composite index slid 0.8 percent to 2,821.67. Heating oil rose 1 cent to $1.49 a gallon.
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Twitter fell as much as 4.8 percent to a record low at US$13.72 after brokerage MoffetNathanson downgraded the company’s stock to “sell” from “neutral”. Additionally, the dollar has been helped by a string of positive economic data releases including, most recently, Tuesday’s better-than-expected number for new home sales in April (annualized 619K vs 521K expected, with a higher revision for the previous month to 531K).
