Markets edged higher on Monday, continuing their longest winning streak since 1992. Several key economic reports will be released this week, in addition to President Trump’s first address to a joint session of Congress.
Domestic durable goods orders increased 1.8 percent in January, exceeding estimates of 1.6 percent. Pending home sales fell 2.8 percent as prices increased 7.1 percent. Tuesday’s Chicago Purchasing Managers’ Index (PMI) is forecast to show steady growth in the U.S. economy. Chinese manufacturing and non-manufacturing PMI reports, UK manufacturing PMI figures and U.S. crude inventory levels will be available on Wednesday. Chinese figures are expected to show a slower, but still expanding rate of growth. The British report is forecast to reflect a slight decline.
Despite OPEC production cuts, crude inventory levels are expected to increase more than 2 million barrels. Economists are forecasting a slight uptick in wages and consumer spending. Auto sales are expected to strengthen from January’s pace of 17.5 million annual sales to 17.7 million. Economists expect Initial claims for unemployment will remain at four-decade lows.
92 percent of the S&P 500 has reported thus far. Two-thirds of companies have beaten their earnings per share forecasts. The earnings growth rate has risen to 4.9 percent. Eight of 11 sectors have recorded higher growth rates due to upside earnings surprises. Widely held companies reporting this week will include retailers Target and Dollar Tree. Target (TGT) has previously reported lackluster holiday sales. Although sales lagged last quarter, analysts are expecting significant growth from Dollar Tree (DLTR).
Lowe’s (LOWS) will report earnings on Wednesday. Like Home Depot (HD), which reported last week, the company is expected to benefit from the strong housing market and surging consumer confidence. The same day, electronics retailer Best Buy is also scheduled to report. The company has beat earnings estimates the last four quarters. Analysts are expecting continued growth in sales when warehouse club Costco (COST) reports Thursday. The parent of social media company Snapchat is expected to release its initial public offering Wednesday after the bell with a stock price between $14 and $16 per share.