The stock market didn't make much headway on Tuesday, yet it still headed higher thanks to a typical dash of buying interest in the afternoon session. That buying interest has carried over this morning, too, thanks to IBM (IBM), which reported better than expected third quarter results.
For what it's worth, IBM's adjusted third quarter earnings per share were flat year-over-year and its revenue dropped 0.4%, adding to a streak of 22 straight quarters now that IBM hasn't reported any revenue growth on a year-over-year basis.
Shares of IBM, though, are up nearly $10.00, or 6.8%, in pre-market-trading, which will be a boon for the price-weighted Dow Jones Industrial Average.
IBM's influence is clear to see in the Dow Jones Industrial Average futures, which are up 93 points, ensuring that the Dow is going to spike through 23,000 at the open.
The broader market is looking a little more subdued, but ultimately continues to sport a bullish bias. The S&P futures are up four points and the Nasdaq 100 futures are up five points.
A Citigroup upgrade of Merck (MRK) to Buy from Neutral and a strong earnings report from Lam Research (LRCX) have acted as added sources of support.
Other influences outside the corporate sector include Treasury Secretary Mnuchin reportedly guaranteeing President Trump will sign a major tax bill by year end, rising oil prices that have followed the API's report of a large drawdown in oil inventories, Chinese President Xi Jinping reiterating China's focus on reducing overcapacity and excess leverage, and the fear of missing out on further gains.
It's hard to figure out how the Housing Starts and Building Permits report for September will be spun. It was weaker than expected for both starts and permits, yet weak data can often be played up as a positive for a continuation of easy monetary policy.
Housing starts declined 4.7% month-over-month to a seasonally adjusted annual rate of 1.127 million (Briefing.com consensus 1.160 million). Building permits, which are a leading indicator, decreased 4.5% to a seasonally adjusted annual rate of 1.215 million (Briefing.com consensus 1.225 million).
The key takeaway from the report is that the weakness in starts and permits was concentrated in the South region, which suffered the biggest hit from the hurricanes, so one could reasonably assume that the October report will show better results.
The starts data was accented by a 4.6% decline in single-family starts and a 5.1% decline in multi-unit starts. Single-family starts, however, were up in all regions, with the exception of the South (-15.3%).
The month-over-month decrease in building permits was driven entirely by multi-family units. Single-family permits were flat while multi-family permits declined 16.1% after increasing 12.9% in August.
The futures market took this data in stride for the most part, as did the Treasury market.
The latter was already weak ahead of the report and didn't make up any lost ground after it. The 10-yr note yield is up three basis points to 2.34%, getting added pressure perhaps from an asset rotation into the indefatigable stock market.