Home prices, consumer confidence — What you need to know in markets on Tuesday

Markets Reporter
Yahoo Finance

Talk about a rebound.

On Monday, the market ripped higher after last week saw stocks have their worst week since January 2016. The tech-heavy Nasdaq led gains on Monday, rising 3.2%, or 227 points, while the Dow was up 669 points, or 2.8%, and the benchmark S&P 500 added 2.7%, or 70 points.

Stocks started the day sharply higher and after losing some momentum near noon in New York, moved up and to the right unabated through the close.

Facebook (FB) shares, however, were laggards again in an up market, gaining just 0.4% on the day after having dropped as much as 5% early in the sessions after the FTC said it opened an investigation into the company. Shares of the social media company lost 13% last week.

On Tuesday, investors will have a slightly busier calendar than Monday, though the holiday-shortened trading week is an overall quiet one in terms of catalysts from the economics or earnings calendar.

Highlights Tuesday morning will include the monthly reading on home prices from S&P/Case-Shiller, which is expected to show home prices rose 0.6% over the prior month in January.

The latest reading on home prices from S&P/Case-Shiller is expected for release in the morning.
The latest reading on home prices from S&P/Case-Shiller is expected for release in the morning.

Markets will also be on the lookout for The Conference Board’s latest reading on consumer confidence, which is expected to show another increase in confidence in March to a reading of 131. Consumer and business confidence has been among the strongest economic data points since President Donald Trump’s election win in November 2016.

On the earnings side, highlights expected Tuesday should include Restoration Hardware parent company RH (RH), Sonic (SONC), and food giant McCormick (MKC).

Investors will also, of course, be looking to see if Monday’s rally is durable or another false start with stocks having traded nearly down to their lows from the sell-off of early February.

Ryan Detrick, senior market strategist at LPL Financial, noted Monday that the S&P 500’s move in excess of 2% for the third straight day marks the first time since August 2015 the index has seen this many consecutive moves this large in either direction. The index hasn’t seen four straight moves of this size since October 2011, and the longest ever streak for moves of 2% or more is seven — which took place in 2008 and 1987.

And so while historical analogues for the stock market oftentimes make the future look more certain than it really is, Detrick’s data gives us a good sense of just how choppy this recent trading has really been.

Last week’s headlines from the Fed, the White House, and the tech space were certainly not encouraging for investors looking for reassurance amid what turned out to be a weak bounce off the February 8 low.

But the fall of 2011 followed the U.S. debt rating getting downgrade while 2008 and 1987 are years that no investor with any sense of history will forget. And the news last week might not have been great, but it wasn’t that bad.

Which indicates that right now, the market’s relative instability is feeding off itself. If 2017 was a year in which all bad news could be discounted because of the hopes for tax reform that would bolster the bottom lines of corporations, 2018 is the opposite: tax reform has come and gone and the future doesn’t hold any obvious positive catalysts for investors to grasp onto.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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