Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Friday, Oct. 25. The Bottom Line segment of today’s podcast starts at (3:34) for listeners who want to skip ahead.
State of Play
Stocks finished higher yesterday for the first time this week. As we eye our board of indicators for signs of direction at 0550, it looks like some risk-on could be developing:
Stock index futures are pointing to gains with the S&P 500 and Nasdaq up about 0.3% each;
Commodities aren’t doing much. WTI crude oil is up about 0.5% to trade around $70.50/barrel. Copper is down just 0.3%;
Cryptos are gaining ground with Bitcoin up 1% to trade around $67,600;
Bonds are unchanged. The 2-year yields 4.07% whilst the 10-year yields 4.20%.
Today’s Known Events
Durable goods orders are out at 0830. Economists who were surveyed expect a decrease of 1.1% month-over-month after no change the previous month. If you exclude transportation items, the core durable goods orders are expected to decline a lot less, by just 0.1% MoM after a 0.5% increase last month.
There are some earnings as well:
Colgate (CL 0.00%↑) is the biggest name to report before the open at 0930;
AutoNation (AN 0.00%↑) is also worth watching;
Newell Brands (NWL 0.00%↑) and New York Community Bancorp (NYCB 0.00%↑) are two portfolio holdings that also report. The Contrarian finds himself bullish on NWL after hating himself for buying it for years. The company trades at 0.4x sales and 4x cash flows and still finds itself stuck near multi-year lows.
The Bottom Line
The S&P and Nasdaq are on track to end the week with losses, which would mean the end of a six week winning streak. But it’s close as the two indexes down less than 1% on the week.
Figure earnings will be the driver here. It’s thanks to Tesla (TSLA 0.00%↑) earnings on Wednesday that we aren’t down more — especially tech. There were some worrying signs from Southwest Airlines (LUV 0.00%↑), which lowered guidance. Then there was Starbucks (SBUX 0.00%↑) pre-earnings warning. Those are two pretty big names when it comes to tracking consumer spending…
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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Durable Goods Orders, Some Earnings