Favorable earnings reports on the home front and a not-so-bad
bond auction in Spain provide the backdrop for today's trading
action. This morning's housing report is a bit on the mixed side,
but the strength on the Permits side likely trumps the Starts
weakness, in my view.
After showing promising momentum in the winter months, housing
reports have been less than inspiring lately. Today's mixed Housing
Starts reading follows Monday's slip up in housing market index
(HMI) and a slew of less than encouraging readings on the sector
last month. That said, there is nevertheless some evidence of
improvement on the housing front, likely setting up the sector for
gains in the long run.
In today's reading, we got a weaker than expected 5.8% decline
in Housing Starts to the annualized rate of 654K in March. This
follows the 2.8% drop in February to the 694K level (modestly
revised down). Permits were a different story altogether, likely
indicating more strength down the road. Housing Permits increased
to their highest level since September 2008, by rising 4.5% in
March to the annualized rate off 747K. Starts had increased by 4.8%
in February to the 715K annualized rate. This set of data doesn't
negate the 'green shoots' narrative, but it doesn't build on it
On the earnings front,
) came out with a solid earnings and revenue beat and raised its
dividend. And contrary to trends in estimate revisions with the
rest of the corporate world, Goldman's estimates had been moving up
lately, increasing by almost 14% in the past month alone. We also
got an earnings and revenue beat out of
Johnson & Johnson
) modestly came ahead of EPS expectations on roughly in-line
revenues. Today's flood of earnings reports continues throughout
the day, with tech giants
) reporting after the close.
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