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This morning, the lukewarm parade of new market information continues to flow. It’s fitting that in these traditionally low-volume trading periods we don’t get earth-shattering data that could change one’s overall investment perspective. That said, we do see new economic data coming in, and retailers continue to report fiscal Q2 (ending January) earnings. Currently, the Dow is -15 points, the S&P 500 is -3 and the Nasdaq -11 points. If we want to look for some good news here, we appear to be setting the table for some room to the upside once everyone comes back from vacation.
Housing Starts for July came in basically even with expectations: 1.452 million seasonally adjusted, annualized units represent a notable gain from the downwardly revised 1.398 million reported the previous month. For some perspective, cycle highs were 1.583 million in May of this year, while January saw 1.340 million. So we’re right in the middle currently. Single-family starts grew +6.7%, +9.5% year over year, despite mortgage rates over 7% — the highest levels we’ve seen in more than 20 years.
Building Permits came in a bit below where analysts had predicted: 1.442 million versus 1.47 million anticipated but basically in-line with the downwardly revised 1.441 million reported for June. We have to go back to the second half of 2022 to see the high end of this cycle (1.588 million last September), but as we saw in the Homebuilder Confidence survey yesterday, the first month-over-month drop in seven months illustrates some trepidation for homebuilders going forward.
Target (TGT - Free Report) put up a strong +27.7% earnings beat in its fiscal Q2 report this morning, with $1.89 per share well ahead of the $1.41 in the Zacks consensus — and more than 4x higher than the 39 cents per share from the year-ago quarter. Revenues, however, at $24.77 billion, came up short of expectations by -1.9%. Further, Target has cut full-year earnings expectations to a range of $7-8 per share; consensus had been for $7.85. That said, the company noted a recovery in sales during July after a weak May and June. This may be one reason shares are jumping +7% in today’s pre-market (though still down nearly double-digits year to date).
TJX Companies (TJX - Free Report) , the parent of TJ Maxx and Marshall’s discount retailers and carrying a Zacks Rank #2 (Buy) into its earnings report, trounced expectations on its bottom line this morning: earnings of 85 cents per share surpassed the 76 cents for a tide +11.8% positive surprise. Revenues beat estimates by +2.64% — $12.76 billion outpaced the $12.43 billion anticipated. Shares are presently up +2.8% on the news; the stock remains a laggard to the S&P 500 year to date, but not as much as Target.
This afternoon, we’ll see the minutes from the latest Fed meeting, which may give clues following the latest 25 basis-point rate hike whether the monetary policy body still has a big appetite for raising rates higher. Of course, we’ve seen plenty of economic and earnings data since — and will continue to do so until the Fed’s next interest rate decision five weeks from today — but taking the temperature of voting members of the Fed may reveal some clues for future actions. We’ll also get quarterly earnings from Cisco Systems (CSCO - Free Report) after today’s closing bell.
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Mixed Housing Sector Data for July
This morning, the lukewarm parade of new market information continues to flow. It’s fitting that in these traditionally low-volume trading periods we don’t get earth-shattering data that could change one’s overall investment perspective. That said, we do see new economic data coming in, and retailers continue to report fiscal Q2 (ending January) earnings. Currently, the Dow is -15 points, the S&P 500 is -3 and the Nasdaq -11 points. If we want to look for some good news here, we appear to be setting the table for some room to the upside once everyone comes back from vacation.
Housing Starts for July came in basically even with expectations: 1.452 million seasonally adjusted, annualized units represent a notable gain from the downwardly revised 1.398 million reported the previous month. For some perspective, cycle highs were 1.583 million in May of this year, while January saw 1.340 million. So we’re right in the middle currently. Single-family starts grew +6.7%, +9.5% year over year, despite mortgage rates over 7% — the highest levels we’ve seen in more than 20 years.
Building Permits came in a bit below where analysts had predicted: 1.442 million versus 1.47 million anticipated but basically in-line with the downwardly revised 1.441 million reported for June. We have to go back to the second half of 2022 to see the high end of this cycle (1.588 million last September), but as we saw in the Homebuilder Confidence survey yesterday, the first month-over-month drop in seven months illustrates some trepidation for homebuilders going forward.
Target (TGT - Free Report) put up a strong +27.7% earnings beat in its fiscal Q2 report this morning, with $1.89 per share well ahead of the $1.41 in the Zacks consensus — and more than 4x higher than the 39 cents per share from the year-ago quarter. Revenues, however, at $24.77 billion, came up short of expectations by -1.9%. Further, Target has cut full-year earnings expectations to a range of $7-8 per share; consensus had been for $7.85. That said, the company noted a recovery in sales during July after a weak May and June. This may be one reason shares are jumping +7% in today’s pre-market (though still down nearly double-digits year to date).
TJX Companies (TJX - Free Report) , the parent of TJ Maxx and Marshall’s discount retailers and carrying a Zacks Rank #2 (Buy) into its earnings report, trounced expectations on its bottom line this morning: earnings of 85 cents per share surpassed the 76 cents for a tide +11.8% positive surprise. Revenues beat estimates by +2.64% — $12.76 billion outpaced the $12.43 billion anticipated. Shares are presently up +2.8% on the news; the stock remains a laggard to the S&P 500 year to date, but not as much as Target.
This afternoon, we’ll see the minutes from the latest Fed meeting, which may give clues following the latest 25 basis-point rate hike whether the monetary policy body still has a big appetite for raising rates higher. Of course, we’ve seen plenty of economic and earnings data since — and will continue to do so until the Fed’s next interest rate decision five weeks from today — but taking the temperature of voting members of the Fed may reveal some clues for future actions. We’ll also get quarterly earnings from Cisco Systems (CSCO - Free Report) after today’s closing bell.