Market Recap for Monday, April 4th, 2016 – Here we go again!

By Markus Heitkoetter

It was like a page out of the old playbook…

Fed concerns + Crude Oil slide = Stocks lower

Boston Fed President Eric Rosengren was the culprit this time, suggesting that a rate hike before the market expects one is likely. And that Fed Funds Futures pricing in zero or one rate hike this year is probably “too pessimistic.”

The Fed has made it clear that the “plan” is to raise rates 2 times in 2016. So Rosengren’s comments about the current Fed Funds probabilities shouldn’t come as a surprise. BUT traders didn’t seem to care for his comments about a rate hike coming BEFORE the market expects one!

With renewed rate hike uncertainty and lower oil, the session was choppy. And by the end of the day, the major indices had retreated from 2016 highs.

Here’s where the major indices ended the day:

The S&P finished with a 0.3% loss. Down 7 points, the S&P ended at 2,066.

The DOW ended 0.3% lower. Dropping 56 points, the DOW closed at 17,737.

The NASDAQ was down 0.5%. With a 23 point drop, the NASDAQ finished at 4892.

Crude Oil (CL) was a drag on the markets after posting a 2.9% loss today. CL finished the day at $35.73 a barrel with the lowest close since February.

Today’s excitement came from the airline industry. Virgin America (VA) exploded higher on news that Alaska Air (ALK) has agreed to buy the company for a $57/share in a $2.6 billion deal. VA finished the day with a 42% gain.

Looking ahead to tomorrow, the key reports include: Trade Balance at 8:30am ET,  ISM Non-Manufacturing PMI and JOLTS Job Openings at 10:00am ET.

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