The Day Ahead: Equities Soft Ahead of Housing Data
US equities have been rising for the past six trading days, but even though first-quarter earnings continue to roll in with positive results, the futures market is looking soft as the week comes to an end.
“Earnings at GE, the bellwether of the U.S. economy, beat expectations in the latest quarter,” noted economists from BMO. “BoA also exceeded estimates, hitting the high bar set earlier this week by JPM and Wells Fargo.”
Even so, Dow futures are down 15 points to 11,081 and S&P 500 futures are off 2.25 points to 1,206.25. The 2 year Treasury note is +0-01 at 100-00 yielding 0.996% and the 10 year Treasury note is +0-05 at 98-14 yielding 3.817%.
Meantime, NYMEX crude oil is down 77 cents to $84.74, and Spot Gold is trading $3.85 lower at $1,155.40.
Key data on housing the consumer sentiment could quickly turn stocks positive though.
Key Events Today:
8:30 ― Housing Starts dropped a sharp 5.9% in February, which commentators attributed to poor weather. For the same reason, the index should rebound this month, though the anticipated gains don’t necessarily translate into sustained growth. Economists anticipate residential home construction to move up from 575,000 to 605,000, with permits to follow behind somewhat.
“Housing starts in February tumbled in the Northeast and South because of snow storms across the eastern half of the U.S. and colder than normal weather in the South,” said economists from IHS Global Insight. “Housing permits, however, will probably slip in response to new home sales sinking to record lows. Builders are being ultra-cautious not to oversupply the market.”
9:00 ― Kevin Warsh, a governor at the Federal Reserve, speaks to the Hyman Minsky Conference at the Levy Economic Institute of Bard College in New York.
10:00 ― Consumer Sentiment could rise several points this month as the public could be be feeling a little better that the economy finally added some jobs last month. The Dow dancing at the 11,000 mark doesn’t hurt either. The Reuters/U of Michigan index currently stands at 73.6 and is expected to move up to 75.0 in April.
“News of an upturn in employment in March should boost confidence in the economic recovery and expectations for income growth in the year ahead,” said economists from IHS Global Insight. “The recovery in the expectations component of the sentiment index has been lagging. A rising stock market and stabilizing home prices should also strengthen ratings of personal finances.”