Stocks started lower Tuesday as enthusiasm that had futures higher waned into the opening bell.
“Since Nov.’21, the last trading day of the month has been up 4 times, and down 11, for an average return of -0.30%,” BTIG technical strategist Jonathan Krinsky wrote. “All of the up days, however, have been +1.42% or more.”
“We haven’t had back-to-back positive last days of the month during this stretch, and January was +1.46%. The last day of February has historically been bearish, and has been down eight straight years (avg. -0.54%), and 10 of the last 11.”
The S&P/Case-Shiller house price index for December fell to an annual rate of 4.6%, below the consensus of 5.8%.
“We expect a very weak spring housing market, given the back-up in mortgage rates, and a further increase in supply as older homeowners in the suburbs seek to cash-in on the surge in home prices during the pandemic before it all reverses,” Pantheon Macro said. “But what might be rational for individuals – get out, while the going is still goodish – will only speed the drop in aggregate home prices.”
On the manufacturing front, the February Chicago PMI is out right after the opening bell. The forecast is for a small rise to 45.
The Conference Board’s measure of February consumer confidence arrives shortly afterwards. The consensus is for a rise to 108.5.
“Consumer sentiment is generally influenced by the media narrative,” UBS’ Paul Donovan wrote. “This data is seasonally adjusted, while the Michigan consumer sentiment data last week was not (and seasonal adjustment may be adding distortions because of the non-seasonal nature of post-pandemic consumer behavior).”
“In our view, bulls should also be concerned about the widening divergence between S&P 500 Operating and Reported GAAP EPS,” Wolfe Research said. “Historically, gaps like this have generally occurred before big overall earnings declines.” (See chart at bottom.)
See the stocks making the biggest moves this morning.