Before the Bell - Economic reports have been very sparse so far this week and that will again be the case today. But the next two days will see a step-up in issuances. On point, tomorrow will bring data on weekly jobless claims. That survey will come out before the stock market begins trading. Then, after the opening bell, we will see releases on sales of existing homes and the leading economic indicators. Before all of that takes place, expectations are that the stock market will commence trading this morning in unprepossessing fashion.
As for these pending reports, expectations are that jobless filings will tick up modestly from last week's 576,000. Also, forecasts call for existing home sales to edge downward for March from 622,000 to 611,000. Moreover, the leading economic indicators are projected to rise by 1.0%. In February, the gain had been a nominal 0.2%. Then, on Friday, the Commerce Department will report on new home sales. In this release, a solid monthly increase is the consensus forecast. Meanwhile,
Thus far this week, Wall Street has focused on other things than economic issuances. First, investors have been chagrined by the steady drumbeat of rising COVID-19 cases. The emergence of virulent strains of variants of this disease and high infection rates not only in our country but especially in such offshore sites as Brazil and India have caused a stir on the Street. Then, there is earnings season, which to date has been generally positive, with strength shown among banking behemoths, including Bank of America (BAC) and technology stalwarts like International Business Machines (IBM).
As for the stock market, after a succession of all-time highs in the Dow Jones Industrial Average and the S&P 500 Index and a good comeback by the NASDAQ through last week, stocks have faltered during the last two trading sessions. The downturn has not been major, but not incidental either, with the losses on Tuesday, for example, featuring a 256-point setback in the Dow Jones Industrial Average and a 128-point drop in the technology laden NASDAQ.
Regarding the market, we sense that the latest declines are little to fret over, as the profit taking seems to be mild as earnings season has been bolstered by an encouraging round of reports for the most part. Among the other stalwarts to report this week have been Dow components Procter & Gamble (PG), Travelers (TRV), and Johnson & Johnson (JNJ). Each member of this trio has outperformed expectations. Finally, Treasuries rose yesterday and the yields on these notes and bonds declined, thus easing inflation fears just a bit. – Harvey S. Katz, CFA