Yellen, housing, and consumer confidence — What you need to know in markets on Tuesday
The second day of the final trading week of the first quarter will bring us one of the week’s busiest schedules.
Federal Reserve Chair Janet Yellen will speak on a panel in London on Tuesday, and the data highlights will include the April report on home prices from Case-Shiller and the June report on consumer confidence from The Conference Board.
Consumer and business confidence, which spiked after the election, has remained near these high levels, though both readings have gotten less attention from markets of late as the story there hasn’t changed.
Additionally, both these surges were seen as potential harbingers of increased consumer spending or business investment, and so far follow-through has been mixed at best.
On Monday, markets finished mixed with tech stocks lagging after each of the major averages opened higher and fell during the morning before trading in a narrow range for the balance of the day. The biggest movers were a story perhaps overlooked by the average investors, as The Wall Street Journal noted that 38 of the top 40 cryptocurrencies listed on Crypto Market Cap were down on Monday.
Rental cars and tech giants
On Monday, two separate stories involving two tech titans and two rental car companies hit the tape.
In the morning, Alphabet’s (GOOGL) self-driving car unit Waymo had reached an agreement with Avis (CAR) to manage its fleet of autonomous vehicles, including things like cleaning the cars, changing tires, changing oil and so on. You know, the things Avis already does for the cars you and I can rent.
No financial terms were disclosed but investors liked the news: Shares of Avis rose 14% on Monday.
In similar news, Bloomberg reported Monday afternoon that Apple (AAPL) and Hertz (HTZ) had reached a deal for the car rental company to help with the iPhone maker’s self-driving car fleet.
Bloomberg said Apple would lease Lexus RX450h SUVs from Hertz, and according to Apple’s license to test self-driving cars in California, it would lease three cars from Hertz. Shares of Hertz, which rallied in sympathy with Avis earlier in the session, spiked again after this news crossed and closed the session up 13.6%.
Now, recall that these deals contained no financial details, and yet the market read these as financially positive events for both car-rental businesses.
It is, of course, worth nothing that both stocks have a considerable short float, meaning shares are being sold short in bets that the price will fall. And the long-term charts for both stocks are not pretty; Monday’s rally was but a brief bright spot in a long run of pain.
But these moves, to our minds, also reveal that there is an almost insatiable desire by investors to get involved in self-driving cars, which are seen as the next big thing. Again, these are car rental companies operating in asset-intensive businesses being undercut severely by ride-sharing services like Uber and Lyft that make road transportation much more manageable in most all major U.S. cities.
In today’s market, however, it seems there isn’t much that a couple of big tech names — and the buzziest tech phrase of the moment — can’t make exciting. At least for one day.
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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