Stocks are on track for starting today’s session modestly in the green, the third straight day of gains if sustained through the end of the session. A batch of mixed economic data and oil prices crossing the $50 mark provide the backdrop for today’s session.
On the data front, we got a positive Jobless Claims reading this morning, with initial claims dropping back to the 260K level and likely raising hopes for a stronger jobs reading next Friday. This morning’s Durable Goods report was mixed at best, with the report’s ‘headline’ growth coming in better than expected, but the ‘core’ reading short of estimates. The ‘core’ reading, known in the report as non-defense capital goods excluding aircraft, came in at a decline of -0.8%, with the prior-month’s reading revised down into negative territory following the initial ‘unchanged’ level.
This ‘core’ reading serves as a proxy for private sector capital expenditures, which has been under pressure for some time as a result of weakness in the manufacturing sector as a result of global growth issues and the energy sector’s well-known problems. None of these are new issues, but today’s Durable Goods report reconfirms that the problems in that space aren’t going away any time soon.
The investment component of the first quarter GDP report was in the negative on the first read, which isn’t expected to materially improve in the revised reading coming out this Friday. Today’s April Durable Goods report indicates that trends in capital investment aren’t expected to improve in any meaningful way, even though overall GDP growth is on track to experience a notable improvement.
In corporate news, we got a strong earnings report from Lions Gate Entertainment (LGF) and a mixed report from Costco (NASDAQ:COST) (COST), with Costco beating on EPS but revenues coming short on flat same-store sales growth — the first flat comps showing for the retailer in six years.
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