U.S. Stocks Climb, Led by Financials as Energy Rallies With Oil

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Why the Reflation Trade May Not Have Rolled Over Yet

U.S. stocks climbed amid a rebound in financials and a rally in energy and materials companies.

The S&P 500 jumped 0.7 percent to 2,359 at 4 p.m. in New York, as European markets climbed. The U.S. benchmark sparked a recovery in foreign markets as it pared losses to 0.1 percent on Monday, after posting its biggest five-day drop since November last week. The Dow Jones Industrial Average added 151 points to 20,702.

  • Financial shares rally 1.4% for biggest jump since March 1
  • Energy and materials stocks up at least 1.1% with West Texas crude ahead 1.3% and Bloomberg Commodity Index rising for 1st time in 7 sessions
  • 10-year Treasury yield up 4bps to 2.42%
  • VIX down for 3rd session to 11.5
  • Volume 4.7% below YTD average
  • While there is investor skepticism that Trump will fare better on tax reform and infrastructure spending than on health care, “some in the market do appear to want to give him the benefit of the doubt for now,” Michael Hewson, chief market analyst at CMC Markets, wrote in a note
    • Richmond Fed March mfg. survey at 22 vs est. 15
    • Consumer confidence jumped in March to the highest in more than 16 years
    • U.S. merchandise-trade deficit narrowed by more than projected in February
    • U.S. Feb. advance wholesale inventories rose 0.4%; est 0.2%
    • Home prices in 20 U.S. cities climbed in the 12 months through January at the fastest pace since July 2014
    • Federal Reserve Bank of Chicago President Charles Evans said two interest rate increases may be right for this year, given uncertainty surrounding the outlook for inflation and government spending
    • Dallas Fed President Robert Kaplan said the central bank is making slow and gradual progress toward its inflation goal
  • EARNINGS (S&P 500):
    • After-market Tuesday: RH (RH)
    • Pre-market Wednesday: Paychex (PAYX)
    • Stoxx 600 up 0.6%; miners, carmakers, banks lead gains
    • Basic Resources Index gains 1.7%, tests 100-DMA of 413.13

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