Tuesday, February 18, 2025

Pre-market futures are starting a new holiday-shortened trading week higher, with all four major indexes currently riding in the green. The Dow is +81 points at this hour, the S&P 500 is +23, the Nasdaq +96 points and the small-cap Russell 2000 +9. All four are also up over the past five trading days, and all but the Russell are up over the past month.

Empire State Manufacturing Surprises to the Upside

Monthly manufacturing data from the Empire State survey swings to a positive this morning, +5.7 versus -1.0 expected, for the fifth positive month in the past seven. This is a nice bounce-back from the unrevised -12.6 reported for January. November had the strongest monthly number in the past year, +20.2; April had the weakest: -19.4.

Homebuilder Confidence Index After the Open

Later this morning, the Homebuilder Confidence survey for February hits the tape. It’s expected to tick down to 46 from 47 reported the prior month, which was the strongest since April of last year. August was the low point of the past 12 months, at 39. Considering that mortgage rates are not expected to sink down to more comfortable levels in the near term, we’d have to say homebuilder confidence is hanging in there. We’ll see what the results are today.

Earnings Reports This Morning: MDT, BIDU

MedTech giant Medtronic MDT beat earnings estimates in its fiscal Q3 report this morning by 3 cents to $1.39 per share, while revenues in the quarter slightly missed expectations to $8.29 billion. As a result, shares are selling off by -4.8% at this hour, pulling back some of the +16% gains year to date. For some perspective, however, Medtronic revenue still came in notably higher than the $8.09 billion reported in the year-ago quarter. For more on MDT’s earnings, click here.

Check out the updated Zacks Earnings Calendar here.

Basically the Chinese equivalent to Google, Baidu BIDU also reported earnings this morning, outperforming estimates on both top and bottom lines in its Q4 report. Earnings of $2.63 per American Depositary Share (ADS) easily swept past the $1.78 in the Zacks consensus. Revenues of $4.68 billion were solidly ahead of the $4.56 billion expected. But concerns about ad revenues missing estimates are sending shares down -4%, dialing back some of the +15.6% in gains year to date.

What to Expect from This Trading Week

Compared with the past two weeks — which brought us Jobs numbers and Inflation Rates, as well as earnings reports from marquee names — we’re a little quieter here in this holiday-shortened trading week. Among those touchstones we can look forward to are Housing Starts and Building Permits, minutes from the January Fed meeting, Philly Fed manufacturing data, and S&P flash Services and Manufacturing PMI. 

In terms of earnings season, we embark on the final leg of calendar Q4 earnings this week. We know this when we start to see the major big-box retailers like Walmart WMT report, which it will ahead of the opening bell on Thursday. Earnings season does not signal its end, however, until NVIDIA NVDA reports, and that’s not until a week from tomorrow.

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