The S&P 500 climbed more than 3.00% on Monday, initially led by a better than expected earnings report from Lowe’s, the home improvement retailer. To begin Tuesday, its rival Home Depot has just announced its Q1 earnings also beat expectations with a 44% gain. S&P 500 futures fell nearly six points in pre-market trading to 912.7, while Dow futures were down 60 points to 8530, and Nasdaq futures had fallen four points to 1392.5.
Unlike Monday, however, there’s some data on the docket that could sway investor sentiment.
At 8:30, the Commerce Dept. will release its Housing Starts & Building Permits release for April. Analysts expect housing starts ― plans for constructing single-family homes ― to stabilize above an annualized pace of 500k. The consensus view is for starts to tick up 2.5% to 523k, while building permits ― which anticipate starts by one to two months ―should gain 2.7% to 530k.
Not all analysts are convinced the report will see improvement, however. Michael Gregory at BMO Capital Markets said there are signs housing is stabilizing, but bad weather probably dampened activity in April, leading to a 2% decline in starts to a 500k pace.
“Nevertheless, allowing for a weather-related rebound in May, recent results should mark the lows for starts and permits amid this worst housing recession in the post-WWII period,” he said, noting that the NAHB survey of homebuilder sentiment ticked up two points on Monday.
The only other data to be released Tuesday are two weekly retail sales surveys: the ICSC-Goldman Sachs survey and the Johnson Redbook.
Also, the Wall Street Journal is leading with an analysis that over 900 smaller banks could lose “as much as $100 billion from commercial real estate loans.”