Key insights
- Markets are cautiously optimistic ahead of the FOMC meeting. Focus is on PPI data, which is expected to remain above the Fed's 2% target. Housing data is expected to show continued weakness. Earnings from LULU, DOCU, OKLO, M, and MU are also in focus, with LULU expecting negative earnings growth. The market's direction hinges on the Fed's stance on inflation and interest rates.
It’s St Patrick’s Day, sure’n begorrah, and pre-market futures are fighting back into the green, where they closed Monday. Tensions regarding the Middle East in general and the Strait of Hormuz in particular appear to have loosened, but it’s probably best to treat this as an ongoing situation worth checking back in with. As of right now, the Dow is +88 points, +0.19%, the S&P 500 is +8 points, +0.12%, the Nasdaq +13, +0.05%, and the small-cap Russell 2000 +2 points, +0.1%.We’re light on both earnings reports and economic releases this morning, with Pending Home Sales for February hitting the tape a half-hour after the open. Expectations are for another slight slip, -1.0%, following -0.8% the prior month, and this speaks to the ongoing morass in the domestic housing industry — particularly on the non-luxury side. For earnings, while we did see Tencent Music Entertainment TME meet earnings and see its share price jump ahead of the open, the main reportage happens after the close today.Once we’ve closed the regular trading session, lululemon LULU, DocuSign DOCU and nuclear reactor designer Oklo OKLO report quarterly results. While LULU expects negative earnings growth, -22.3%, DOCU is expected to gain +10.5% on its bottom line. As for OKLO, it has yet to be publicly traded a full year yet, though earnings are expected to come in light for the quarter.As we mentioned yesterday, Wednesday is the biggest day for both earnings and economic prints: Macy’s M reports ahead of the open and Micron MU follows the close, while the Producer Price Index (PPI) — the wholesale print on monthly inflation — brings us February numbers. Year-over-year PPI has been dancing above and just below +3%, clearly higher than Fed Chair Powell’s optimal +2% inflation; we’ll see if anything changes, while keeping clear that we are currently embarking on new global economic realities these numbers won’t show.Speaking of Fed Chair Powell, his penultimate Federal Open Market Committee (FOMC) meeting begins today and concludes tomorrow — with a near-100% certainty that interest rates will not change from the +3.50-3.75% range they’ve been in since December. It will be the first Fed meeting since the U.S. and Israel began its latest bombing campaign on Iran, so Powell’s comments may be worth hearing, especially as he only has a two-month future as head of the Fed.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Macy's, Inc. (M) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
Docusign Inc. (DOCU) : Free Stock Analysis Report
Tencent Music Entertainment Group Sponsored ADR (TME) : Free Stock Analysis Report
Oklo Inc. (OKLO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research