Stocks began the week on a down note and, ahead of the market open, the futures are suggesting a mixed start to the trading day. Markets in Asia were mostly up in overnight trading. Meanwhile, the major European indexes are hovering close to the unchanged mark. Elsewhere, oil prices have edged lower, with West Texas Intermediate down about 0.2%, to around $77.40 a barrel.
This morning, the Census Bureau released its figures on durable goods orders for January, which showed a monthly decrease of 6.1%. This followed a downwardly revised 0.3% decrease in December (previously +0.6%). This was well below Wall Street’s expectation for a gain in new orders of 0.2%. On a year-over-year basis, demand for durable goods was down 0.8%. Most of the monthly decline was in transportation equipment (down in three of the last four months), which fell 16.2%. Excluding transportation, new orders were down 0.3%.
On Thursday, investors will get the latest Personal Consumption Expenditure price index (PCE) from the Bureau of Economic Analysis. This is a key report, as it’s one of the inflation indicators that is more closely watched by the Federal Reserve. The consensus is a bit mixed, with analysts calling for the so-called “core” figure (which excludes food and energy prices) to show a 2.8% increase for the 12-month period through January (down from a 2.9% increase for the like period through December.) However, analysts expect the month-over-month figure to be up 0.4% (versus a 0.2% gain posted the month before). With recent reports showing that inflation remains sticky, investor expectations for a rate cut from the central bank have been pushed back, with the Fed Funds Futures indicating a slightly better than 50% chance that there may be a quarter-point reduction in June.
Also Thursday, the Department of Labor will release last week’s numbers on initial jobless claims. Expectations are calling for an increase of 209,000 claims, up from the level of 201,000 the week before.
Lastly, the Institute for Supply Management will release its Manufacturing Purchasing Managers Index. That figure is widely expected to show that manufacturing activity declined again in February, but to a lesser degree than in January. Estimates are calling for the index to come in around 49.5%, up from 49.1% the month before. (Figures above 50 denote expansion, while those below 50 indicate contraction.) If the numbers are on the mark, it would be the 16th consecutive month of decline for the sector.
Summing up Monday’s moves for the major indexes, the Dow Jones Industrials shed 62 points, or 0.2%, the S&P 500 was down 19 points (0.4%), and the tech-focused NASDAQ slipped 20 points (0.1%). – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
CLICK HERE for more information on our services or call 1-800-VALUELINE (1-800-825-8354). Our account managers are available Monday through Friday, 8:00 AM to 6:00 PM Eastern Time.
