Portfolio Strategy Published by Raymond James & Associates
Michael Gibbs, Director of Equity Portfolio & Technical Strategy
Joey Madere, CFA
Richard Sewell, CFA
10/23/2019
The S&P 500 futures trade six points, or 0.2% below fair value following some disappointing earnings results and guidance from Caterpillar (CAT 131.95, -1.74, -1.3%) and Texas Instruments (TXN 116.70, -11.87, -9.2%).
Both companies missed top and bottom-line estimates, with Caterpillar issuing downside FY19 guidance and Texas Instruments issuing downside Q4 guidance. Shares of Caterpillar, however, have significantly cut losses after being down about 4% earlier.
Boeing (BA 340.85, +3.50, +1.0%) missed earnings estimates, too, but investors have been comforted by the company still expecting the 737 MAX to return to service this year. Shares initially fell 2% as the company also pushed back 777X first deliveries to early 2021, but the 737 outlook has given the battered stock some reprieve.
U.S. Treasuries are up in textbook fashion following disappointing guidance from economically-sensitive companies. The 2-yr yield is down six basis points to 1.55%, and the 10-yr yield is down four basis points to 1.73%. The U.S. Dollar Index is little changed at 97.55. WTI crude is down 1.0%, or $0.54, to $53.96/bbl.
On the data front, the weekly MBA Mortgage Applications Index fell 11.9% following a 0.5% increase in the prior week. Later, investors will receive the FHFA Housing Price Index for August at 9:00 a.m. ET.
U.S. equity futures:
S&P 500 Futures -5 @ 2990
DJIA Futures -34 @ 26729
Nasdaq Futures -3 @7856
Overseas:
Europe: DAX +0.1%, FTSE +0.3%, CAC -0.6%
Asia: Nikkei +0.3%, Hang Seng -0.8%, Shanghai -0.4%
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