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Pre-Markets Mixed Ahead of Monday's Bell

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Monday, August 26th, 2024

We begin a new week of trading on a relatively even keel. Pre-market futures are pretty flat: +30 points on the Dow, -30 on the Nasdaq and +3 points for the S&P 500. We’ve gradually stepped back toward where we were at the start of the month, which began with a big slide into negative territory. Year to date, we’re still up nicely — +18% on the Nasdaq and S&P, +10% on the small-cap Russell 2000 and +8% on the Dow.

Bond yields — used as a predictor for future interest rates — are remaining well behaved below 4%: +3.82% on the 10-year, +3.92% on the 2-year. At this point, the Federal Open Market Committee (FOMC) meeting scheduled for September 17-18 is expected to bring Fed funds rate cut since the onset of the Covid pandemic, and the first move either direction since the Fed raised to 5.25-5.50% back in late July of last year.

Durable Goods Rebound to Green on Headline


Durable Goods Orders for July are out before today’s opening bell, with the headline +9.9% the highest we’ve seen since May 2020. This follows a downwardly revised -6.9% for June, which happens to be the lowest monthly print since April of 2020. Yet we’ll see it was large purchases from the Transportation sector which pushed this figure to those lofty highs; ex-Transportation, this headline moves to -0.2% — lower than the big downward revision the prior month, from +0.5% originally reported to -0.1% this morning.

Non-defense, ex-aircraft — a proxy for “normal” business spending — came in at -0.1%, slightly below the 0.0% expected. The June figure was revised down from +0.9% to +0.5%. Shipments were weaker: -0.4%, the lowest we’ve seen since May’s -0.6%. Electrical supplies and auto parts were down for the month. “Normal” business investment usually ebbs or flows cyclically.

Economic Reports This Week


Tomorrow morning, we’ll see Case-Shiller home prices for June, along with Consumer Confidence reads after the opening bell. Wednesday will be quiet, but Thursday picks up the pace: Trade Balance and Inventories join the revision to Q2 GDP and Pending Home Sales, along with normal Weekly Jobless Claims. Plenty of opportunity here for us to adjust our expectations for a 25 basis point (bps) or 50 bps rate cut.

Friday morning brings us the Fed’s preferred gauge for inflation: Personal Consumption Expenditures (PCE). Expectations month over month are for a slight uptick to +0.2% from +0.1%. Year over year is projected to remain flat at +2.5%, while core PCE year over year — stripping out volatile food and energy expenditures — is predicted a tad higher: +2.7% versus +2.6% reported a month ago.

NVIDIA Earnings Wednesday Afternoon


The earnings season laggards pull themselves across the finish line this week, including arguably the best stock on the planet: NVIDIA (NVDA - Free Report) . The video graphics processor giant expects triple-digit growth on both top and bottom lines for its fiscal Q3. The company is riding a six-quarter winning streak, with a trailing 4-quarter average beat of +18%. Did we mention this may be the best stock on the planet?

We’ll also hear from Salesforce (CRM - Free Report) after Wednesday’s close, with CrowdStrike (CRWD - Free Report) and Affirm (AFRM - Free Report) along for good measure. Retailers reporting this week include Abercrombie & Fitch (ANF - Free Report) , Kohl’s (KSS - Free Report) and Smucker’s (SJM - Free Report) Wednesday, Best Buy (BBY - Free Report) and Dollar General (DG - Free Report) Thursday.

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