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End of Day Brief - Wednesday Mar. 31 - S&P makes a new high

Market Snapshot

SP 5003972.89+14.34(0.36%)
10-yr Note 0/321.720
NYSEAdv 1772 Dec 1431 Vol 1.2 bln
NasdaqAdv 2388 Dec 1449 Vol 4.9 bln

Industry Watch

Strong: Information Technology, Consumer Discretionary, Utilities
Weak: Energy, Financials, Consumer Staples, Real Estate, Materials, Industrials

Moving the Market

-- S&P 500 sets all-time high in growth-stock day

-- End-of-quarter rebalancing activity

-- Strength in the information technology sector

Stocks had a winning session to close out the first quarter of the year, led higher by the tech-heavy Nasdaq, as the market eyes President Biden's infrastructure program that will be announced today. Press reports put the price tag at $2T, with the program focused on infrastructure, housing, green energy and manufacturing. While additional stimulus will be welcomed by Wall Street, there is also the prospect that taxes will need to rise to pay for it.

ECONOMIC EVENTS: In the U.S., ADP reported private payrolls grew 517,000 in March, above the consensus forecast for 500,000 private payroll additions. The Chicago PMI climbed 6.8 points to 66.3 in March in a better than expected report. An index of pending home sales tumbled 10.6% to 110.3 in February.

TOP NEWS: Shares of Microsoft ($MSFT) gained 1.7% after the U.S. Army announced that it will work with the company on the production phase of the Integrated Visual Augmentation System program as it moves from rapid prototyping to production and rapid fielding. The contract could be worth up to $21.88B over 10 years, a Microsoft spokesperson told CNBC.

Walgreens Boots Alliance ($WBA) rose 3.6% following the company's report of better than expected fiscal second quarter results and hike to its fiscal year earnings outlook. Of note, Walgreens pointed out that it has administered over 8M COVID-19 vaccines to date, including 4M vaccines administered in March.

In COVID-19 news, Pfizer ($PFE) and BioNTech ($BNTX) announced that, in a Phase 3 trial in adolescents 12 to 15 years of age with or without prior evidence of SARS-CoV-2 infection, the companies' COVID-19 vaccine demonstrated 100% efficacy and robust antibody responses, "exceeding those recorded earlier in vaccinated participants aged 16 to 25 years old." Separately, the National Institutes of Health announced that an investigational vaccine co-developed by NIAID investigators and Moderna ($MRNA) designed to protect against the B.1.351 SARS-CoV-2 variant has been administered as part of a new Phase 1 clinical trial evaluating the vaccine candidate's safety and immunogenicity in adult volunteers.

In M&A news, Cubic ($CUB) announced that it has accepted a proposal from Veritas Capital and Evergreen Coast Capital Corporation, an affiliate of Elliott Investment Management, to increase the price per share of their pending acquisition of Cubic to $75 per share in cash. In response, Singapore Technologies Engineering announced it has terminated acquisition discussions with Cubic. "ST Engineering noted that Cubic determined to accept an offer of $75 per share in cash that is lower in value than ST Engineering's $78 per share in cash offer, which we continue to believe is compelling," the company stated.

MAJOR MOVERS: Among the noteworthy gainers was Conn's ($CONN), which rose 24.3% after the company's fourth quarter earnings report. Also higher was Tesla ($TSLA), which gained 5.1% ahead of the company's likely release its "highly anticipated" Q1 delivery numbers over the coming days.

Among the notable losers was Lululemon ($LULU), which dropped 3.3% after its quarterly earnings report. Also lower was Romeo Power ($RMO), which fell over 20% after its "terrible" first earnings call as a public company.

Reviewing Wednesday's economic data:

  • The ADP Employment report pointed to the addition of 517,000 private payrolls in March ( consensus 525,000) while the February increase was revised up to 176,000 from 117,000.
  • The Chicago PMI for March increased to 66.3 ( consensus 60.0) from 59.5 in February.
  • Pending home sales dropped 10.6% in February ( consensus -2.6%) following a 2.4% decline in January (from -2.8%)
  • The weekly MBA Mortgage Applications Index decreased 2.2% following a 2.5% decline in the prior week.

  • Russell 2000 +12.4% YTD
  • Dow Jones Industrial Average +7.8% YTD
  • S&P 500 +5.7% YTD
  • Nasdaq Composite +2.8% YTD

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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