Last week was a painfully quiet week in terms of price action for the S&P 500 ($SPX) (SPY) . The week finished almost flat, and it trades in a fairly narrow range all week. Individual stocks had a lot more trading potential. With earnings starting back up, names like Tesla (TSLA) and Morgan Stanley (MS) produced some exciting volatility. Tesla being the big shock of the week with a top-line earnings beat but a profitability miss, the stock plummeted the following day.
The news was also fairly mixed last week, but with existing home sales and building permits missing their estimates, some signs of economic contraction could finally be breaking through. This week looks to be an exciting week in terms of earnings reports with some bigger names reporting like Abbvie (ABBV), Caterpillar (CAT), and ExxonMobil (XOM). There is a fairly slow news week in the US, but that could be offset by all the earnings calls. Here are 5 themes to watch in the Market this week.
Consumer Confidence
Tuesday at 10 am eastern is the CB consumer confidence number. This often doesn’t do much to move the market but with the mixed reports last week and the mixed results in earnings, it's possible it starts to take on a more important role. In addition, it also shows at a more macro level how the surveyed households view the country's economic conditions. While this is a small sampling of about 3,000 households, it still can be a key piece of insight into longer-term economic feelings in the country.
New Home Sales
New Home Sales are the counterpart to Existing home sales which came out with a miss last week. It could be important to see in the coming months if these reports continue to come out as misses to show a weakening real estate market. Real Estate is one of the largest economic decisions that happen in the US, so a slowdown could pose some real economic impacts on the overall economy. It will also be important to watch the actual values, if the “estimate” keeps getting lower so that news doesn’t look as bad, but the total value is continuing to shrink, it could still be bad for the economy.
Earnings
It probably goes without saying that earnings are here and that all traders and investors should be cognizant of when their holdings report. In addition to the excitement that the actual reports present, watching how the Net Income and Interest expense is trending could provide clues into economic conditions further down the road. As always with earnings trading, stay safe and trade with a stop!
Pending Home Sales
Pending Home Sales are due Thursday at 10 am Easter, and much like new home sales could provide a gauge to the economic activity surrounding real estate. While it may not move the market at the moment, keeping an eye on how home sales are trending could prove significant in the future.
Core PCE
Core PCE is out Friday at 8:30 am Eastern, and much like the rest of this week's issue, it has a macroeconomic spin. Unlike the Consumer Price Index which measures all pricing, PCE only measures the Personal Consumption expenditures aimed at the end user. A beat here is arguably more impactful than a high CPI as this is a direct report of how much the individual is spending on goods and services they consume.
Best of luck this week and don’t forget to check out my daily options article.
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On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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