Markets hold steady

Stock markets hovered around record levels and bond markets were mixed following a strong start to the week. U.S. stocks rose marginally to record levels and Treasuries gained a second day as economic data showing uneven growth added to speculation the Federal Reserve won’t rush to raise interest rates.

The Standard & Poor’s 500 Index advanced 0.23 percent to a record. The Nasdaq Composite Index jumped 0.38 percent to an all-time closing high. The yield on 10- year Treasury notes fell to 2.17 percent. The Stoxx Europe 600 Index added 0.3 percent.

On the data front in the US purchases of previously owned homes unexpectedly fell in April, a sign the industry’s recovery remains uneven, while U.S. jobless claims over the past four weeks dropped to a 15-year low. Federal Reserve minutes on Wednesday signalled officials are unlikely to raise rates in June, while keeping open the option to tighten this year. On the other hand the index of U.S. leading economic indicators rose in April by the most in nine months, a sign of vitality in the world’s largest economy.

Fed officials last month didn’t expect to raise rates at their June meeting even as they concluded that a first-quarter economic slowdown was unlikely to persist, the minutes showed. Fed Chair Janet Yellen is due to give a speech today on the economic outlook.

The driving force behind the equity session yesterday was a deal between Omnicare Inc. and CVS Health Corp., the biggest U.S. retailer of prescription drugs, who agreed to acquire the nursing-home pharmacy for a total enterprise value of $12.7 billion.

Earnings yesterday were mixed, the outlier being Best Buy Co. whose shares jumped after posting profit that topped estimates. Inc. climbed on a higher revenue forecast and NetApp Inc. sank after revenue and profit that missed estimates.

This morning markets appear to be trading mixed again on the news that German business confidence fell for the first time in seven months in May, signaling caution over the growth outlook for Europe’s largest economy. The Ifo institute’s business climate index dropped to 108.5 from 108.6 in April. That still beat the median estimate of 108.3, and an earlier report showed German capital investment increased at the fastest pace in a year last quarter.

News from Greece where German Chancellor Angela Merkel said that greater efforts are needed to unlock bailout funds for Greece after late-night negotiations with Greek Prime Minister Alexis Tsipras failed to yield any sign of a breakthrough. With time running out for a deal to free up the remaining 7.2 billion-euro tranche of aid, Merkel’s discussions in Latvia with Tsipras and French President Francois Hollande broke up in the early hours of Friday with an agreement only to keep talking. Tsipras talked of a resolution “soon,” whereas Merkel said there’s “a whole lot to do.”

Looking at today’s calendar, it’s a data rich day today in the European session as we kick off with the final Q1 GDP print for Germany quickly followed by business and manufacturing confidence readings out of France. In the US focus will be on the inflation figures while we’ll also get average weekly earnings data. The European summit continues in Riga for a second day while as mentioned earlier, the Fed’s Yellen is also due to speak later on the US economic outlook which will be worth watching.

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