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Market indices faded yesterday’s losses even further today, after starting off the week with the worst trading day since June. We’ve gone from robust gains off the June lows to a sort of holding pattern until late last week, when we pitched downward notably across the board. We’re now down in four of the last five sessions on the Dow and S&P 500 — -0.47% and -0.22%, respectively — while the Nasdaq, essentially flat at -0.002% for the day, is lower for five of the last six trading days.
Only the small-cap Russell 2000 broke the other way and finished slightly in the green: +0.31%. In all, seven of the S&P’s 11 sectors were lower, salvaged by Energy, Materials, Consumer Discretionary and Industrials. Yesterday, all 11 closed in the red. Over the past five days, all indices are down -3%+ except the Nasdaq, which is -4.6% over the same time period.
Much is still heavily reliant on the tone of Fed Chair Jay Powell’s speech from the Jackson Hole symposium on Friday; until then, we do not expect much further pressure to the downside. On the contrary — we see the possibility that markets could springload higher, as long as the harshest fears of Powell’s possible hawkishness do not emerge from Powell Friday. Everyone knows the Fed is eventually going to a Fed funds rate of 3% and above; the only real question is whether they go there next month with a third-straight 75 basis-point (bps) hike.
Powell himself has gotten very practiced in carrying a demure disposition during his time at the podium, likely not to unduly rattle the nerves of investors. It hasn’t always worked; sometimes his words in real time would have an immediate soothing effect, only to get a re-think afterwards and send markets into a downward slide. But with inflation metrics at last beginning to roll over, it’s unlikely Powell has anything harrowing to dispel to the market-trading public late this week.
Upscale department store chain Nordstrom (JWN - Free Report) outpaced expectations on both top and bottom lines after today’s closing bell. Earnings of 81 cents per share beat the Zacks consensus by a penny, while revenues of $4.10 billion more easily surpassed the $3.97 billion estimate. But shares have tumbled more than -12% on the news, as full-year guidance was slashed on both earnings and sales, warning of tougher times ahead for the company in 2H-22.
Luxury home builder Toll Brothers (TOL - Free Report) also reported earnings this afternoon, posting $2.35 per share for a five-cent beat over expectations, while revenues for fiscal Q3 came up short: $2.3 billion versus $2.49 billion anticipated. As we’ve seen in other housing data over the past quarter, demand is down — -44% on overall contract value and -60% on actual contracted homes — while cancellations are up +13%. However, business in August has already shown a big improvement month over month, though shares are -2.7% on the news.
Image: Bigstock
Markets Fade Monday's Pullback Further; Nordstrom Beats, Toll Bros Mixed
Market indices faded yesterday’s losses even further today, after starting off the week with the worst trading day since June. We’ve gone from robust gains off the June lows to a sort of holding pattern until late last week, when we pitched downward notably across the board. We’re now down in four of the last five sessions on the Dow and S&P 500 — -0.47% and -0.22%, respectively — while the Nasdaq, essentially flat at -0.002% for the day, is lower for five of the last six trading days.
Only the small-cap Russell 2000 broke the other way and finished slightly in the green: +0.31%. In all, seven of the S&P’s 11 sectors were lower, salvaged by Energy, Materials, Consumer Discretionary and Industrials. Yesterday, all 11 closed in the red. Over the past five days, all indices are down -3%+ except the Nasdaq, which is -4.6% over the same time period.
Much is still heavily reliant on the tone of Fed Chair Jay Powell’s speech from the Jackson Hole symposium on Friday; until then, we do not expect much further pressure to the downside. On the contrary — we see the possibility that markets could springload higher, as long as the harshest fears of Powell’s possible hawkishness do not emerge from Powell Friday. Everyone knows the Fed is eventually going to a Fed funds rate of 3% and above; the only real question is whether they go there next month with a third-straight 75 basis-point (bps) hike.
Powell himself has gotten very practiced in carrying a demure disposition during his time at the podium, likely not to unduly rattle the nerves of investors. It hasn’t always worked; sometimes his words in real time would have an immediate soothing effect, only to get a re-think afterwards and send markets into a downward slide. But with inflation metrics at last beginning to roll over, it’s unlikely Powell has anything harrowing to dispel to the market-trading public late this week.
Upscale department store chain Nordstrom (JWN - Free Report) outpaced expectations on both top and bottom lines after today’s closing bell. Earnings of 81 cents per share beat the Zacks consensus by a penny, while revenues of $4.10 billion more easily surpassed the $3.97 billion estimate. But shares have tumbled more than -12% on the news, as full-year guidance was slashed on both earnings and sales, warning of tougher times ahead for the company in 2H-22.
Luxury home builder Toll Brothers (TOL - Free Report) also reported earnings this afternoon, posting $2.35 per share for a five-cent beat over expectations, while revenues for fiscal Q3 came up short: $2.3 billion versus $2.49 billion anticipated. As we’ve seen in other housing data over the past quarter, demand is down — -44% on overall contract value and -60% on actual contracted homes — while cancellations are up +13%. However, business in August has already shown a big improvement month over month, though shares are -2.7% on the news.
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