Earnings Bonanza: Daily Contrarian, Oct. 26
Also new readings for Case-Shiller home prices, new home sales, and consumer confidence
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Good morning contrarians!
Stock futures are pointing to a higher open as of 0645, Tech stocks are leading the way, with the Nasdaq up 0.5%. S&P 500 and Dow Industrials are up about 0.3% to 0.4%. This a day after the S&P 500 and Dow closed at record highs.
It’s a busy day. We have a set of important data releases when it comes to the U.S. consumer and a whole mess of earnings.
The Macro Data First
At 1000 we will receive the Conference Board Consumer Confidence Survey along with the Census Bureau’s new home sales. New home sales are more of the hard data point here, whilst consumer confidence is more of a fickle thing. FWIW, the reading is expected to come in at 108.3, slightly below last month’s 109.3. This thing has been trending downward lately, but it’s still well above levels from earlier this year.
When it comes to home sales, economists expect a figure of 760,000 in September, which would be the third straight month of increases. This metric is well off its high set during the peak of Covid but certainly still healthy. I shouldn’t need to remind you that new home sales are an important gauge of consumer spending. The biggest of big ticket purchases.
Speaking of home sales we also get the Case-Shiller House Price Index for August. Economists expect an increase of 20%, in line with the previous month. This index has been putting in solid gains since late last year and appreciated by double digits every month since December. That’s out a little earlier, at 0900.
Earnings Bonanza
Earnings have already started to trickle in with Hasbro (HAS), Xerox (XRX), Centene (CNC), and PulteGroup (PHM) reporting. These were all mixed. 3M (MMM) beat on top- and bottom-line though.
Before 0930 we’re due to hear from UPS (UPS), Raytheon Technologies (RTX), Lockheed-Martin (LMT), Sherwin-Williams (SHM).
Update: Major earnings miss from LMT and shares are dropping more than 7%. UPS and SHM beat. So did JetBlue (JBLU).
Later on we get Microsoft (MSFT), Google (GOOG), and Twitter (TWTR), and Visa (V). Also Robinhood (HOOD) for all you meme stock traders.
Bottom Line
It’s been a great month for stocks. The Dow, S&P, and Nasdaq up more than 5% with four trading days left in the month (including today). Pretty sure the indexes have recaptured the losses from September. But today is a massive day for earnings and this could potentially set the tone for the rest of the week — and the rest of the year. With 84% of S&P 500 companies beating earnings estimates so far, those that fail short will likely be punished. To wit, Lockheed is down more than 7% in the pre-market.