Yahoo Finance Econ Data, Q1 Earnings: Drip, Drip, Drip; CSX Beats
Market activity has been slowly turning downward over the past week or so of trading. We’ve kind of gotten lulled to sleep a bit by the lack of big shifts from day to day on the major indices, but after fighting back from Friday lows, the drift down from the last half-hour of regular trading yesterday now has a distinct shift lower. The Dow shed -108 points on the session, -0.32%, the S&P 500 -0.59%, the Nasdaq dropped -97 points to -0.80% on the day, and the small-cap Russell 2000 slipped -0.54%. All four indices are now down -3/4% to -1.0% over the past five trading days.
Existing Home Sales for March came in lighter than expected this morning after the opening bell, registering 4.44 million for the month and down from the 4.55 million in the previous month. We’re still out of the cycle lows from November to January, when mortgage rates spiked to over 7% on the 30-year fixed, but we’re still in the lower half of prints over the past 12 months. Those cycle lows, incidentally, took out Covid-era lows from three years ago.
Also, U.S. Leading Economic Indicators (LEI) for March were weaker than analysts had been looking for, coming in at -1.2% from an expected -0.7% and a previous-month print of -0.5%. The past six months have demonstrated a steeper rate of decline than the prior six months: -4.5% from -3.5%, and now stands at its lowest level since November 2020. Before today’s open, we were already discussing the clearly weakening economy in terms of higher Jobless Claims and a very weak Philly Fed read; these figures add even more support to this argument.
After the closing bell, railroad major CSX CSX easily surpassed expectations on both top and bottom lines: earnings of 48 cents per share outpaced the Zacks consensus by 6 cents, while revenues in the quarter of $3.71 billion beat the $3.58 billion expected demonstrably. It Merchandise business topped estimates, with chemicals, food and autos helping bring in $2.16 billion in the quarter. The devastating derailment of a rival Norfolk Southern NSC train in Ohio mid-quarter may have given a boost to NSC’s competitors, like CSX. We’ll look for these answers in the company’s conference call.
Tomorrow morning continues the Q1 earnings cavalcade, with Procter & Gamble PG, among others, reporting earnings. We’ll also get a look at S&P Manufacturing and Services PMI for April ahead of the opening bell, which are both expected to tick down slightly from March levels. No single report is expected to have an outsized effect on monetary policy (scheduled for May 2-3) by itself, but this drip-drip-drip of myriad economic and earnings releases may accumulate into something more meaningful over the next week and a half or so.
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