Church and state are two things it is said that are best left separate. The same thought process, though, appears to be resonating somewhat with respect to the stock market and state.
The headlines detailing the condition of Washington politics right now aren't exactly flattering, yet the S&P 500 and Nasdaq Composite both hit record highs on Monday. They aren't breaking down today either despite the latest headline out of the Washington Post suggesting President Trump might have improperly shared highly classified information with Russian officials at a White House meeting last week.
We'll stop there, because we have no interest in inflaming political sensitivities. The point of the matter is simply to highlight how the stock market continues to be resilient to selling interest no matter the headlines -- foreign or domestic -- even if it is not getting all that far these days on buying interest.
Something good or bad will happen eventually to drive a more forceful break of the narrow trading range the S&P 500 has been in since March 1. It could be a political catalyst or it could be something else. At the moment, though, the stock market is observing the speed limit on an otherwise open and flat road.
Dow component Home Depot (HD) has helped keep the motor running this morning as it reported another impressive quarter of operating results, which were highlighted by a 5.5% increase in first quarter comparable store sales and reassuring fiscal 2017 guidance.
Dick's Sporting Goods (DKS) and TJX Cos. (TJX), two other notable retailers reporting their results this morning, have not impressed investors. Their stocks are down 11.9% and 5.3%, respectively, in pre-market trading.
Shares of HD are up 1.4% in pre-market action. That gain and oil prices ($49.23, +$0.38, +0.8%) that continue to press higher have the S&P futures up four points and trading 0.1% above fair value.
We'd venture to say that a relatively disappointing Housing Starts and Building Permits Report for April has also helped support the market from the standpoint that it is tempering concerns about the Fed needing to be overly aggressive on its path to normalization.
To that end, housing starts ran at a seasonally adjusted annual rate of 1.172 million (Briefing.com consensus 1.255 mln), down 2.6% from a downwradly revised rate of 1.203 million (from 1.215 mln) for March. The downturn was driven by a 9.2% decline in multi-unit dwellings, yet single-family starts were up just 0.4%.
Building permits declined 2.5% to a seasonally adjusted annual rate of 1.229 million (Briefing.com consensus 1.270 mln), which featured a disappointing 4.5% drop in permits for single-family units.
The number of units under construction at the end of the period held steady at a seasonally adjusted annual rate of 1.074 million, which was roughly in-line with the first quarter average, so there won't be any strong growth takeaways there for second quarter GDP estimates.
The Industrial Production and Capacity Utilization Report for April will follow at 9:15 a.m. ET.