More Grist For The Mill: ISM, PMI, Auto Sales, Beige Book

Wednesday, June 1, 2016

May 2016 marked the third straight month in the green for S&P 500, though markets fell back Tuesday afternoon to close down a tad. But with many more results from economic data due today and through the remainder of the week, markets could shift either up or down, depending.

One things we’re fairly certain of at this time, however, is that whatever moves the market makes are unlikely to be too drastic in either direction. That’s because, even though we await the May jobs report Friday morning, we are unlikely to get a definitive market action until Fed Chair Janet Yellen’s speech next Monday.

Although Q1 earnings season is effectively retired, we did see reports from Michael Kors ( (NYSE:KORS) ) after the bell yesterday and Cracker Barrel ( (NASDAQ:CBRL) ) this morning. Both companies beat analyst expectations — Kors on both top and bottom lines, though revenues are lower year over year, and Cracker Barrel pulled off the coveted beat, raised guidance and an increased dividend. Both stocks are up big in Wednesday’s pre-market.

Later today we expect May auto sales results. The sector has been one of the few strong narratives in the market so far in 2016, though all major automakers are expected to post lower numbers — in the case of Volkswagen (DE:VOWG_p) ( (OTC:VLKAY) ), expectations are for sales 18.7 percent down from May 2015. Much of this is still carried over from VW’s emissions scandal, which took the Germany-based car maker from the biggest seller to the biggest drop-off in sales.

Today’s Institute for Supply Management (ISM) and Purchasing Managers Index (PMI) Manufacturing results are also awaited today, not only by investors but by the various presidents of the Federal Reserve. Though U.S. Manufacturing is no longer the economic driving force Services currently is — and those ISM and PMI numbers are due out Friday — getting both supply and demand results for the month of May are still important puzzle pieces to consider for the health of the U.S. and global economies.

Finally today, the Federal Reserve Board of Governors Beige Book is due to be released this afternoon for the first time since April. This comprehensive study summarizes 12 U.S. districts and their current market conditions. More grist for the mill.

As opinions shift in the outlooks of the various markets, it’s best to track aggregate impressions of these developments as they’re taking place. The Zacks Rank #1 (Strong Buy) to #5 (Strong Sell) and the Zacks Style Score (Value, Growth, Momentum, or VGM) are excellent meters to utilize changing moods among your most loved (and/or loathed) stocks. Check out your favorite stock’s Quote Page on www.zacks.com.

Mark Vickery

Senior Editor