Back to top

Asia, Congress Activity, Put Futures in the Green

Read MoreHide Full Article

Friday, January 25, 2019

By now, it’s become a familiar refrain: no economic data is currently available due to the partial U.S. government shutdown. Now completing its fifth straight week — already an all-time record by a country mile — an estimated 800K U.S. federal workers will see their second payday come and go without compensation. Today, it’s Durable Goods Orders, including data on Core Capital Equipment, and New Home Sales that will be left wanting.

The shutdown, should it continue through next Friday (or longer), will not affect the release of non-farm payrolls from the Bureau of Labor Statistics (BLS) due next week. These numbers include a fresh look at the Unemployment Rate, Average Wage Growth and Labor Force Participation. For December, these BLS numbers were far beyond expectations: 312K new jobs created, with Wage Growth up 40 basis points month over month.

Market indexes are up in today’s pre-market — the Dow in the green a healthy triple digits — despite a disappointing earnings call from Intel (INTC - Free Report) yesterday afternoon, and a comment from U.S. Commerce Secretary Wilbur Ross that we are “miles and miles” from a trade agreement with China. Beyond this, analysts are now predicting a drag on the Q1 economy due to the prolonged government shutdown.

We’re seeing green futures this morning partly on a nice rally in Asia overnight, led by a +1.65% close in the Hang Seng (Hong Kong index). These rallies appear to have stemmed from the People’s Bank of China (PBOC) beginning steps to bring stimulus to the Chinese market, using bill swaps to help offset shrinking growth to the country’s lowest levels in nearly 30 years.

That the U.S. Senate has also begun to bring votes to the floor to re-open the government, even though they have so far initially failed, can also be seen as a positive development for the markets. At this point, following several weeks of more or less total inaction, any activity in Congress in this regard has got to be a welcoming sign. Whether or not the body can pull together a deal, however, is another matter.

Q4 Earnings Roundup

Real quick, we are seeing pre-market Friday earnings reports that are decidedly mixed: Colgate-Palmolive (CL - Free Report) beat by a penny to 75 cents per share on sales +1% from estimates to $3.81 billion. But D.R. Horton (DHI - Free Report) came in light of expectations by 2 cents to 76 cents per share, on $3.50 billion in revenues that also topped consensus by 1%. NextEra Energy (NEE - Free Report) and AbbVie (ABBV - Free Report) both missed on their top and bottom lines, however, both by 2 cents per share and roughly -1% on revenues.

Mark Vickery
Senior Editor

Questions or comments about this article and/or its author? Click here>>

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Published in