Before The Bell
Following a very quiet first three days of this trading week from an economic news standpoint, a trio of key reports will be issued this morning. A few minutes ago, the Labor Department reported that in the latest week the nation saw 547,000 first-time jobless filings--the lowest tally of the pandemic. Estimates had been for 603,000 claims. That latest reading was down from an upwardly revised 586,000 claims in the previous seven-day stretch. Following this release and after a strong day for equities yesterday, the futures are suggesting a mixed opening for the stock market when trading resumes shortly.
In other economic tidings, the National Association of Realtors will issue figures on existing home sales for March shortly after the opening bell. A modest uptick is the forecast. Also, later this morning, the Conference Board will report the leading economic indicators for last month. Here, a nominal 0.2% improvement in February is likely to be followed by a more consequential 1.0% advance in March. Then, tomorrow, the government will report on sales of new homes, where a strong increase is the forecast.
Meanwhile, following back-to-back declines to start the current trading week on worries about rising COVID-19 cases both stateside and globally, and concerns about faltering economic growth as a result, Wall Street righted itself yesterday fashioning a largely wire-to-wire winning session, with nearly all of the major groups participating in the upturn.
Helping the bulls was favorable revenue guidance from such corporate giants as CSX Corp. (CSX). That rail transport company, which posted quarterly results similar to what the Street expected, also indicated demand for the full year 2021 would be stronger-than-expected and the stock rose. Overall, some 75 S&P 500 companies have posted first-quarter results so far, with approximately three-quarters of that group beating the consensus on revenues and/or earnings.
Also rising yesterday were Treasury note yields, which ticked up slightly. They also are nudging higher so far this morning. As for sentiment, it continues to be largely positive, despite the early week softness, with this optimism based mostly on positive forecasts about the economy and earnings. That outlook is prevailing most days, which explains the enduring strength of the bull market. That said, we would keep an eye on the rising rate of coronavirus cases and the continuing climb in price-earnings ratios, both of which suggest the need for some caution.
– Harvey S. Katz, CFA
At the time of this article's writing, the author did not have a position in any of the companies mentioned.
