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Markets grew bearish and cautious today, almost in reverse of yesterday’s heady close into the green across the board. Perhaps another day’s worth of possible default on the national debt, or a recognition that the Fed really isn’t looking toward any interest rate moves lower at all this year, or that recession possibilities aren’t going anywhere. Regardless, the Dow dropped -332 points, -1.00%, the S&P 500 was -0.64%, the Nasdaq outperformed the field, -0.18%, and the small-cap Russell 2000 again rode the caboose, -1.31% on the day.
For the Dow, it’s the sixth lower trading day in the last seven, the 10th of the past 12. It also closed at session lows, as did the S&P and Nasdaq. Energy was the worst trading sector, -12%, followed by Autos -10% and Banks -7%. Homebuilding had a decent day following a surprisingly strong Homebuilder Confidence Survey: a headline of 50 improved on the 45 expected and last month’s figure; it’s also the highest print and first “5-handle” since July of 2022. This offers further proof that the housing market continues to show signs of improvement.
Business Inventories for March also came out earlier today, at -0.01% lower than the 0.0% expected and posted a month ago. This shows that the overall supply glut we saw back in late 2021, early 2022 are now a thing of the past. That said, we haven’t seen a positive read on this metric thus far in 2023. Inventories were reportedly higher at retailers (+0.7%) than manufacturers (-0.8%).
Tomorrow we get new Housing Starts and Building Permits numbers for April. Starts are expected to come down a touch while Permits — often seen as a proxy for future starts — are predicted to rise a tad. We’re currently off January lows on starts, as mortgage rates have eased somewhat since zooming past +7%; but at 1.40 million forecast, we’re also well off the 1.805 million posted a year ago at this time. Permits have posted figures that are a bit more volatile of late, but mostly follow similar trends: cycle lows over the winter, recent highs a year in the rearview mirror.
We’ll also see Q1 earnings results from Target (TGT - Free Report) and TJX Companies (TJX - Free Report) Wednesday, as retailers continue their parade of reports this week and next. Target goes into its earnings release with a Zacks Rank #3 (Hold) and a Value-Growth-Momentum grade of A. TJX also carries a Value-Growth-Momentum grade of A, but currently also has a Zacks Rank of #2 (Buy). Both companies look to improve on revenues year over year, where only TJX is also expected to post positive growth on earnings.
Image: Bigstock
Caution Grips Tuesday's Closing Bell
Markets grew bearish and cautious today, almost in reverse of yesterday’s heady close into the green across the board. Perhaps another day’s worth of possible default on the national debt, or a recognition that the Fed really isn’t looking toward any interest rate moves lower at all this year, or that recession possibilities aren’t going anywhere. Regardless, the Dow dropped -332 points, -1.00%, the S&P 500 was -0.64%, the Nasdaq outperformed the field, -0.18%, and the small-cap Russell 2000 again rode the caboose, -1.31% on the day.
For the Dow, it’s the sixth lower trading day in the last seven, the 10th of the past 12. It also closed at session lows, as did the S&P and Nasdaq. Energy was the worst trading sector, -12%, followed by Autos -10% and Banks -7%. Homebuilding had a decent day following a surprisingly strong Homebuilder Confidence Survey: a headline of 50 improved on the 45 expected and last month’s figure; it’s also the highest print and first “5-handle” since July of 2022. This offers further proof that the housing market continues to show signs of improvement.
Business Inventories for March also came out earlier today, at -0.01% lower than the 0.0% expected and posted a month ago. This shows that the overall supply glut we saw back in late 2021, early 2022 are now a thing of the past. That said, we haven’t seen a positive read on this metric thus far in 2023. Inventories were reportedly higher at retailers (+0.7%) than manufacturers (-0.8%).
Tomorrow we get new Housing Starts and Building Permits numbers for April. Starts are expected to come down a touch while Permits — often seen as a proxy for future starts — are predicted to rise a tad. We’re currently off January lows on starts, as mortgage rates have eased somewhat since zooming past +7%; but at 1.40 million forecast, we’re also well off the 1.805 million posted a year ago at this time. Permits have posted figures that are a bit more volatile of late, but mostly follow similar trends: cycle lows over the winter, recent highs a year in the rearview mirror.
We’ll also see Q1 earnings results from Target (TGT - Free Report) and TJX Companies (TJX - Free Report) Wednesday, as retailers continue their parade of reports this week and next. Target goes into its earnings release with a Zacks Rank #3 (Hold) and a Value-Growth-Momentum grade of A. TJX also carries a Value-Growth-Momentum grade of A, but currently also has a Zacks Rank of #2 (Buy). Both companies look to improve on revenues year over year, where only TJX is also expected to post positive growth on earnings.
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