1. Moving the markets

The S&P 500 managed to find some footing, after a mid-day gag caused by surging bond yields, and scored another record close, powered by blowout earnings from the tech sector, namely Apple and Facebook. Despite their solid performances, the Nasdaq lagged the other two major indexes for the day by a wide margin.

On the economic front, we learned that 1^st quarter GDP was reported at “only 6.4%,” which missed expectations of 6.6% but, is an improvement to the Q4 number of 4.3% The question that ZeroHedge posted “Is this all the growth that $2 trillion in stimulus can buy?” remains a valid one, and it casts doubt on the effects of future reckless money printing in terms what it can really accomplish.

Pending Home Sales disappointed due to low inventory, while last week’s Initial Jobless Claims totaled 553k, just a tad worse than the 528k estimated by Dow Jones.

Crowd favorites Uber and Lyft were manhandled today and got battered after Biden’s plan to make gig workers employees. Bond yields rode the roller coaster by popping and dropping as Bloomberg shows in this chart. The US Dollar roundtripped as well, sold off into the close but managed to eke out a gain. Gold followed suit but ended the session flat.  

While uncertainty played havoc with the markets intraday, in the end, the bulls managed to keep the upper hand when it counted most, namely at the close.

1. Moving the markets

While the futures were flat, the regular session opened with a bounce for the S&P 500, while the Dow and Nasdaq hovered below their respective unchanged lines. In the end, all three indexes meandered aimlessly all day and ended slightly in the red.

The much-expected Fed announcement was a nothing burger with no changes in policy neither in terms of tapering bond purchases nor any potential hike in interest rates. The statement was dovish with optimistic soundbites being offset by downbeat ones, as ZH posted:

…economic activity and employment have strengthened.

Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened.

The sectors most adversely affected by the pandemic remain weak but have shown improvement.

Yet:

The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain.

And most importantly, “inflation has risen, largely reflecting transitory factors.”

In other words, there was no meat on that bone, neither for the bulls nor for the bears, so we ended up going nowhere.

The US Dollar slumped to two-month lows, according to ZH, with bond yields heading south as well, a combination which benefited Gold, but only moderately.  

The Nasdaq showed no bullishness either, despite Google parent Alphabet reporting better-than-expected earnings after the bell on Tuesday with its shares rallying 3%. That was offset by Microsoft topping analysts’ estimates as well, yet the stock dipped 2.8%. Go figure…

All eyes are now on Joe Biden’s $1.8 trillion plan in new spending as well as tax credits for families in need. Higher income tax rates and an increase in capital gains taxes will make tonight’s showing one to remember.