With many European markets closed today for Easter Monday, the US equity markets took the center stage on the first day back after the US Employment report. The S&P 500 Index continued its path upward increasing 9 points to 1187, and closing in on the 1200 index level. Crude oil also continued to push higher despite news last week that was fundamentally bearish on the petroleum complex. Crude oil closed up 1.83 per barrel making a new 52 week high to $86.70.
The increase in the petroleum market comes despite bearish news absorbed by the market last week. Saudi Arabian Oil Minister Ali al- Naimi said the kingdom could boost output by as much as 4.5 million barrels a day once global demand recovers from the economic recession. He also stated that Prices in the $70-a-barrel to $80- a-barrel range is “as close to perfect as possible.” Although quotas have been stable, OPEC has raised total output by 55 thousand barrels per day to 26.84 million barrels per day, the highest since December 2008 and 1.995 above their target. Overall compliance from OPEC nations is approximately 53 percent and none of the members has produced at target rates.
In US Economic news, The Institute for Supply Management’s purchasing managers’ index for nonmanufacturing (service) increased to 55.4 in March. The March number was better than 53.0 in February and 53.5 that were expected. The business activity jumped to 60.0 from 54.8. The employment sub-index rose to 49.8 from 48.6, but remains in contraction territory.
The National Association of Realtors’ index for pending sales of used homes rose by 8.2% to 97.6, according to the NAR. Economists surveyed had expected pending home sales would decline in February by 0.5%. January pending home sales was revised slightly down, to 90.2 from an originally reported level of 90.4. The unexpected increase raised spirits in the housing industry. Home resales had fallen three consecutive times, including a 0.6% drop in February.