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Markets Await Economic Data

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Market futures are up in the pre-market for the second-straight day, with the Dow poised to open +150 points, the S&P 500 +15 and the Nasdaq +50. The tech-heavy Nasdaq is already up for the week; will the others join them?

Last week went much the same way: notable bearishness through the first three days of the week, only to fill in gaps and find attractive values among some of the best publicly-traded companies. The main difference between last week and this is that last week still finished in the red, overall. This week might push us above the threshold.

With calendar Q1 earnings season mostly in the books, and with an Infrastructure Bill in committee on Capitol Hill but yet to make any firm headlines regarding its passage — or what all might be included in it — there are basically no catalysts to take a firm position in market direction at this time. We all know the economy will be heating up from here, but as employment numbers earlier this month illustrated, timing is a key issue.

Thus, investors have been moving indexes mostly sideways over the past month or more — still within the ballpark of all-time high levels, it makes sense that simply bidding up prices without due cause beyond current valuations isn’t considered the smart play at this juncture. Will Infrastructure be what unlocks bullish sentiment in the near future? Will inflation hitting the market forestall any such bounty?

Today, after the market opens, we will get new looks at PMI Manufacturing and Services for May. On the Manufacturing side, an identical 60.5 is expected from the previous month, while Services are expected to dip a tad: 64.3 vs. 64.7 in April. Also, Existing Home Sales for April are expected to reach 60.2 million, a notch above March’s 60.1 million. Will any of these metrics be able to flip the switch toward heavier biased market activity? Highly doubtful.

Deere & Co. (DE - Free Report) posted fiscal Q2 earnings ahead of today’s open, with big beats on both top and bottom lines for the Zacks Rank #2 (Buy)-rated equipment manufacturer: $5.68 per share zoomed past the $4.44 in the Zacks consensus (and in another orbit from the year-ago $2.11 per share) on $11 billion in sales, which amounts to a 6% positive surprise, and easily surpassing the $8.2 billion in revenues posted in the year-ago quarter. Shares are up 32% year to date, +1.5% in the pre-market. For more on DE’s earnings, click here.


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