We kicked off this morning with the September durable goods report. The headline figure of +3.7% was ahead of the 2.3% consensus. However, when excluding the volatile transportation sector, durable goods fell 0.1% vs. consensus expectations for a 0.5% increase. Additionally, new capital goods orders were weaker than expected
Nonetheless, the S&P 500 (INDEXSP:.INX) and NASDAQ (INDEXNASDAQ:.IXIC) squeezed into positive territory as index heavyweights Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) traded up sharply after reporting better-than-expected earnings. Amazon actually hit a new all-time high above the $360 level.
However, the strength in tech did not extend widely across markets as the small-cap Russell 2000 (INDEXRUSSELL:RUT) was down, and many popular high-beta stocks like Netflix (NASDAQ:NFLX), Tesla Motors (NASDAQ;TSLA), and Facebook (NASDAQ:FB) all sold off.
In the near-term, the recent string of mostly mediocre economic data and mixed earnings data (the strength in select names like the aforementioned Amazon and Microsoft notwithstanding) may be fueling expectations that the Fed may further delay the tapering of its quantitative easing activities, or perhaps even increase them. In a market that is largely perceived to be mostly liquidity-driven, data that is weak enough to prevent tapering but strong enough to indicate mere survival may be an ideal combination for the bulls.
Tomorrow's Financial Outlook
On Monday, we'll have more important economic data coming as we'll see the September Industrial Production and Capacity Utilization numbers at 9:15 a.m. EDT. Consensus estimates currently stand at 0.4% and 78%, respectively.
At 10:00 a.m., September Pending Home Sales will be reported. Economists are forecasting a 2.0% month-over-month decrease.
However, the big news will come on the earnings front, with market heavyweight Apple (NASDAQ:AAPL) reporting its fiscal fourth-quarter results after the close. The company has already pre-announced solid revenues for the quarter, so guidance will be key.
Other big names reporting Monday
(NYSE:MRK) before the open, and Seagate Technology
(NYSE:STX) after the close.
No positions in stocks mentioned.
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