After setting fresh all-time highs last week, the major market indexes took a breather on Monday. However, the futures are suggesting stocks may resume their upward push at the start of today’s session. In overnight trading, the markets in Asia closed mixed. Meanwhile, stocks in Europe are showing small gains. Moving over to oil, prices have edged higher, with West Texas Intermediate rising about 0.2%, to around $82.10 a barrel.
The markets got an assist last week after the Federal Reserve kept its overnight rate unchanged and Chairman Jerome Powell maintained that rate cuts are still on the table for this year. If stocks can hold on through this holiday-shortened week, the key U.S. benchmarks are on course to record a fifth-consecutive month of gains.
Fed officials maintain that data trends will be the determining factor for any change in policy. On that front, yesterday’s reports on the housing market were mixed, with building permits for February coming in above forecasts and the prior month’s tally, at 1.524 million. However, new home sales dipped to 662,000, versus 664,000 in January, and the Wall Street consensus of 675,000.
This morning, the Census Bureau reported that orders for durable goods increased 1.4% in February, to $277.9 billion. This topped the 1.2% gain forecasted by analysts, and the revised 6.9% decrease in January (previously -6.1%). On Thursday, the Department of Labor will announce initial jobless claims for last week, which are expected to tick higher, to around 214,000, up from 210,000 the week before. That same day, we’ll also hear from the National Association of Realtors, which will release its figures for pending home sales in February. Expectations are calling for a month-to-month increase of 1.5%, versus the 4.9% gain posted in January.
Finally, although the U.S. markets will be closed in observation of Good Friday, the Department of Commerce is set to release its Personal Consumption Expenditures (PCE) Index for February. Analyst estimates for the figure, which is one of the Fed’s key inflation indicators, are looking for the year-over-year increase to come in flat with the month before, at 2.4%. If that turns out to be the case, it would support the possibility of a quarter-point cut in the Fed Funds rate in June.
Summing up Monday’s moves for the major indexes, the Dow Jones Industrials lost 162 points, or 0.4%, the S&P 500 shed 15 points (0.3%), and the tech-laden NASDAQ was down 44 points (0.3%). – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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