EmailThe U.S. equity market is on course for a higher open, with few if any catalysts other than the QE safety net lending support.
Foreign markets are on the mixed side of things, although changes in both the positive and negative direction have been modest in scope. The indeterminate nature of today's action is evident in news summaries, which attribute losses in the markets that are down to concerns about economic growth and gains in the markets that are up to a sense of optimism about central bank action.
Dow component Caterpillar (CAT) has garnered some added attention since yesterday's close on account of a mixed outlook that includes an expectation for record results in 2012 and some cautious-sounding guidance for 2015. The company's outlook for the worldwide economy is that modest growth is likely but a recession remains possible.
With the broader market having run the way it has, and CAT itself having risen as much as 14% since September 5, it is understandable that the remarks above on the growth outlook would prompt some profit taking. Be that as it may, the S&P futures are still six points above fair value, signalling that participants are not getting too caught up in the cautious view of things -- at least not yet.
A third quarter earnings warning from Forward Air (FWRD), which cited macroeconomic weakness, doesn't seem to be registering much either in terms of having any broad market impact. Shares of FWRD are indicated close to 10% lower in premarket action. It does not have the market cap weight CAT does of course; nonetheless, warnings like the one from Forward Air (and FedEx not that long ago) are telling in terms of the goings-on with the real economy in spite of the central bank stimulus.
Later this morning, we will get some new data that has the potential to spark some added trading action. The S&P/Case-Shiller home price index for July (Briefing.com consensus +0.8%; prior +0.5%) will be released at 9:00 a.m. ET and will be followed by the Conference Board's Consumer Confidence report for September (Briefing.com consensus 63.0; prior 60.6) at 10:00 a.m. ET.
The confidence number will likely draw the most attention given what it will reveal about consumer attitudes in the face of rising stock prices, rising gas prices, a lackluster labor market, and unprecedented central bank action.
Separately, the U.S. Treasury will be selling $35 bln of 2-year notes. Auction results will be announced at 1:00 p.m. ET.
