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Stock futures higher despite weak housing number

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Stock futures are looking strong this morning despite some mixed economic data that had housing starts declining a worse than expected -7.8% to a 1.646 million rate, when economists were looking for a rate of housing starts at 1.70 million. Also falling were building permits, which fell an even larger 9.9% to 1.599 million. Economists were looking for building permits to be at the 1.685 million level. This morning's housing data is hinting to economists that the seasonally warm January/February months most likely boosted housing data released for those two months and that economists most likely didn't discount the warmer January/February weather enough in their current forecasts. In essence, the warmer weather in January and February had many economists looking for more robust housing starts and building permit rates in March with the thought of stronger than expected economic outlook, but today's data hints that builders were just a little more active earlier in the year due to milder weather conditions.

Consumer prices rose just 0.3% in the month of March with the core rate up just 0.1%. Both numbers were lower than the 0.5% and 0.2% respective estimates.

This morning's economic data represents a bit of a mixed bag with a disappointment in the housing data, but good news on the inflation front.

Stock futures are holding at their best levels of the morning as S&P futures trade higher by 8.5 points at 1,112.80, while NASDAQ futures jump 23 points to 1,385 and Dow futures gain 77 points at 10,170.

Fair value for the S&P 500 today is $1.50. HL Camp & Company has their computers set for program buying at $2.29 and set for program selling at $0.30. Fair value for the NASDAQ-100 today is $5.38.

Earnings upbeat in early morning

While economic data was mixed this morning, earnings season is kicking into high gear and analysts are rather active after earnings announcements and adjusting guidance.

Dow component Coca-Cola (NYSE:KO) reported Q1 earnings of $0.40 a share, which was better than consensus estimates of $0.38. Revenues rose 3% to $4.08 billion, which was slightly less than consensus of $4.31 billion. The company said it remains comfortable with the range of analysts' earnings estimates for the full year.

Bear Sterns is out with a call this morning saying that last night's better than expected earnings out of Texas Instruments (NYSE:TXN) and strong wireless handset segment should benefit Nokia (NYSE:NOK) and be a slight positive for Motorola (NYSE:MOT). Should wireless revenues continue to grow sequentially in Q2 and the rest of the year at Texas Instruments (TXN), the Bear Sterns sees positives for RF Micro Devices (NASDAQ:RFMD), Conexant Systems (NASDAQ:CNXT), and Anadigics (NASDAQ:ANAD).

Jeff Bailey
Senior Market Technician
Option Investor

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