Minutes before the start of today’s session, U.S. stock futures are pointing to a positive open. In overnight trading, markets in Asia were mixed. Meanwhile, the major European indexes are showing modest gains. Elsewhere, oil prices have moved lower, with West Texas Intermediate (WTI) down about 0.5%, to around $80.50 a barrel.
Earnings season is in full swing, though expectations for first-quarter results are relatively muted. Instead, the focus is on how companies see the rest of the year playing out in light of stubbornly high inflation and higher borrowing costs. Banks remain in the spotlight today, with Goldman Sachs (GS) and Bank of New York Mellon (BK) reporting results that missed expectations, while Bank of America (BAC) topped analyst estimates. The busy slate for the rest of the week features a number of big names, including Tesla (TSLA), Morgan Stanley (MS), Travelers (TRV), AT&T (T), and American Express (AXP).
On the economic news front, stock futures got a boost after China announced that its economy expanded at an annualized pace of 4.5% in the first quarter, coming in about half a percentage point above the consensus estimate.
This morning we received the March figures for housing starts, which showed a 0.8% decrease, to a seasonally adjusted annualized rate of 1.42 million units. Meanwhile, building permits (which are a more forward-looking indicator) were down 8.8%, to an annual rate of 1.413 million. These will be followed on Thursday with the March readings for existing home sales, where the Street is calling for the rate to dip to about 4.48 million (versus 4.58 million in February), and U.S. leading economic indicators, where a decline of 0.7% is expected (versus -0.3% in February).
If these reports are in line with expectations, the Federal Open Market Committee (FOMC) is likely to stay on course with a quarter-percent hike in the Fed Funds rate at its next meeting, which is scheduled for the first week of May.
Summarizing Monday’s market moves, all three of the major U.S. indexes gained about 0.3%, with the Dow Jones Industrials up 100 points, the S&P 500 advancing by 13 points, and the tech-focused NASDAQ tacking on 34 points. – 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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