This article will be updated throughout the day, so check back frequently for more daily updates.
He Vanguard S&P 500 ETF (NYSEMKT: VOO) closed down 0.3% on Monday as higher 10-year U.S. Treasury yields tempted investors out of stocks and into bonds. However, as yields reversed overnight, so did sentiment on stocks.
Pre-market, it looks like Voo could open 0.1% higher today.
But how long will that optimism last? Maybe less than 48 hours. Today in Washington, DC, the Federal Open Markets Committee is discussing its next interest rate move: to cut or not to cut. Most experts are predicting a 25 basis point cut (that’s 0.25% for you and me) when the decision is announced tomorrow, so it’s unlikely there will be a big jump in stock prices if that’s the real news.
On the other hand, if the FOMC decides No If it decides to cut… or combines a cut with comments suggesting this could be the last cut for a while… or, God forbid, for some reason decides to raise rates tomorrow, you can expect all hell breaks loose in the markets, with Voo falling off at least a small cliff.
Tune in tomorrow for the conclusion of this story. In the meantime, we have some earnings news for you.
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Today the Federal Reserve meeting begins to decide on a new target interest rate. A decision will be announced tomorrow.
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Toll Brothers and Autozone report losses in their results.
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Home construction giant Toll brothers. (NYSE: TOL) reported its fourth quarter numbers last night and the news wasn’t good. The “lost earnings” toll rose 30 cents, reporting a profit of $4.58 per share, when Wall Street was expecting $4.88. Surprisingly, sales exceeded forecasts: $3.4 billion.
Adding to investor dismay, Toll Bros. said its order book at the end of the fourth quarter was just $5.5 billion, down 15% from a year ago. This implies a weakening of the demand for new homes. Toll said it has 4,647 homes awaiting construction right now, up from 5,996 a year ago.
And yes, if the calculations were done correctly, the 22.5% drop in unit order book, in the context of a drop of only 15% in dollar delays, means that house prices continue to rise. No wonder houses don’t move faster!
Toll Bros. shares are down more than 5% premarket.
S&P 500 component company AutoZone (NYSE: AZO) also missed its earnings target this morning, reporting a first-quarter profit of $31.04, $1.83 worse than expected. Revenue approached the $4.6 billion mark, but was still slightly below analysts’ forecasts.