Toll Brothers (TOL) earnings and the Federal Reserve’s Beige Book will be in focus Wednesday.
Luxury homebuilder Toll Brothers is expected to report fiscal second-quarter earnings of 44 cents per share on $1.51 billion in revenue, according to analysts polled by Bloomberg. The company’s quarterly results are expected after the market close and come on the heels of a surprise gain in U.S. home sales during the month of April.
New single-family home purchases rose 0.6% to an annualized rate of 623,000 units. Economists surveyed by Bloomberg were predicting new home sales to plunge to a rate of 408,000. Despite surging unemployment in the U.S. as a result of the COVID-19 pandemic, the housing market appeared to be a bright spot with mortgage rates near historic lows.
“On new home sales, Northeast and West are still down year-over-year, -26.5% and -33.5%, respectively, while South and Midwest up 4.7%, and 26.5%, respectively. Those regions with stricter shelter in place orders seem to be doing worse. That would imply room for some improvement as these regions ‘open-up,’” Renaissance Macro’s Neil Dutta said in an email Tuesday.
The new home sales report boosted the homebuilders. The ETF tracking homebuilders, XHB, has soared nearly 70% since the market bottom on March 23, while the broader market rose more than 30%.
Meanwhile, the Federal Reserve will release its fourth beige book of the year on Wednesday afternoon. In the Fed’s April beige book, COVID-19’s impact on the U.S. economy across the 12 Fed districts was front and center.
“Economic activity contracted sharply and abruptly across all regions in the United States as a result of the COVID-19 pandemic. The hardest-hit industries—because of social distancing measures and mandated closures—were leisure and hospitality, and retail aside from essential goods,” the April Beige Book said.
Wednesday’s Beige Book will likely shed further light on the state of economic activity since the peak of COVID-19’s damage in the U.S.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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