Thursday, September 24, 2015
(This is Mark Vickery covering for Sheraz Mian, who is off today.)
Global markets were down overnight, as a dire lack of market catalysts ahead of the unofficial kick-off of Q3 earnings season in a couple weeks have left progress in the world economy rather aimless. This is particularly pronounced this year following the anti-climactic Fed decision not to raise interest rates late last week.
It's probably an unintended consequence that the Fed's refusal to normalize rates would cause tremors in the markets, caused by fresh worries about the viability of the U.S. economy through the prism of weaker business out of China and elsewhere around the globe, as well as a stronger dollar value. Chairwoman Janet Yellen gives her first speech in awhile later today, at which time we expect she will discuss the Fed's perspective regarding the decision not to raise at the last FOMC meeting.
Durable Goods were down 2 percent in August, which is better than the roughly 2.5 percent drop analysts had been expecting. Ex-food and energy the numbers were unchanged, and ex-aircraft and defense showed down 1 percent. This follows a pretty robust summer for the U.S., and global murkiness seems to be winnowing here lately. Is this sort of lukewarm reading something we might get accustomed to seeing as Q3 earnings season approaches in earnest?
((In fact, earnings season has already arrived. See Sheraz Mian's latest piece here: Are We in an Earnings Recession? )
Jobless claims also came in this morning with a relatively in-line 267K for the week, up 3,000 from last week. What was previously a reporting range of 275-300K may have begun to break through to the downside, but it's too early to tell. And if it does in fact prove to be the case, it's at a glacial pace that does not look to influence near-term trading. But still a good trend as employment continues to strengthen.
Should Q3 earnings season surprise to the upside or downside, we can expect the market to make a definitive move. But that's still a ways off.
Note: In order to get an email alert each time this author publishes a new article, click on the 'Follow Author' link at the bottom of the top-right box of links. In addition to this pre-market open daily article about the market, economy, and the corporate earnings picture, Sheraz also provides detailed earnings analysis in his weekly Earnings Preview .