The stock markets in the United States declined amid investors’ concern regarding the U.S. economy and speculations that Greece will not be able to resolve its debt problems.
In an interview with Bloomberg, Terry Sandven, chief equity strategist at U.S. Bank Wealth Management said, “There’s a sense of uneasiness permeating through the equity market due to first quarter results, mixed signals of economic health and high valuations.”
Roubaix Composite February 2021 Net Return +7.87%; YTD Net Return +11.34%
The February 2021 monthly tearsheet for the Roubaix Fund Composite, a fundamental long/short equity strategy focused on small and mid cap U.S. stocks. Q4 2020 hedge fund letters, conferences and more Roubaix Composite Performance Roubaix generated a net return of +7.87% in February relative to the long-only benchmark Russell 2000 Index total return of +6.23% Read More
Sandven added that the angsts and concerns among investors remain high because the U.S. economy is navigating through a soft patch, and high increase the risk of being wrong.
Investors are also concerned regarding the ability of Greece to pay approximately $11 billion of its debt to the International Monetary Fund (IMF) on May 12. Greece officials assured that their country can make payments to the IMF. Last month, one policy maker suggested that Greece will probably struggle to keep its finances afloat after the end of this month.
U.S. economic data
Today, the Department of Commerce reported that the U.S. trade deficit increased 43.1% to $51.4 billion in March, the largest gap since October 2008.
A separate report from the Institute of Supply Management (ISM) showed that the non-manufacturing index climbed to 57.8% in April.
Investors will pay a close attention to the April jobs report from the Department Labor on Friday. The agency reported that the number of people who applied for unemployment benefits declined 34,000 to 262,000 for the week ended April 26.
Kevin Caron, a market strategist and portfolio manager at Stifel Nicolaus & Co., commented, “This is a market that’s struggled to get out of the gate this year. There’s a lot of choppiness — no clear direction. There’s a sense of uncertainty right now, and the market is eventually going to have to look for real growth in the economy, and that’s looking fairly weak.”
- Dow Jones Industrial Average (DJIA) – 17,928.07 (-0.79%)
- S&P 500- 2,089.47 (-1.18%)
- NASDAQ- 4,939.33 (-1.55%)
- Russell 2000- 1,214.19 (-0.54%)
- EURO STOXX 50 Price EUR- 3,546.56 (-2.38%)
- FTSE 100 Index- 6,927.58 (-0.84%)
- Deutsche Borse AG German Stock Index DAX- 11,327.68 (-2.51%)
- Nikkei 225- 19,531.63 (+0.06%)
- Hong Kong Hang Seng Index- 27,755.54 (-1.31%)
- Shanghai Shenzhen CSI 300 Index- 4,596.84 (-3.99%)
Stocks in Focus
The stock price of Apple declined 2.25% to $125.80 per share today. The company is facing a new patent infringement case involving its HealthKit platform and Health App. The case was filed by LMG 3 Marketing and Development Corp.
Separately, CEO Tim Cook admitted that the success of the iPhone and Mac computers is hurting iPad sales. “We’re clearly seeing cannibalization from iPhone and on the other side from the Mac. And, of course, as I’ve said before, we’ve never worried about that. It is what it is. That will play out and, at some point, it will stabilize,” said Cook during an earnings call. Apple’s iPad sales declined 23% year-over year.
The shares of Herbalife closed $40.71 per share, down by 4.71% today. However, the stock price of the company surged more than 16% to $46.71 per share during the extended hours trading. Herbalife reported better than expected earnings for the first quarter. The company said its adjusted earnings were $1.28 per share, higher than the $1.01 per share expected by analysts. It revenue declined 12% to 1.1 billion.
Salesforce.com gained almost 6% to $75.84 per share due to the report that Microsoft is considering a bid to acquire the cloud computing company. Saleforce.com has a market value of approximately $50 billion.