Market participants will receive a check on the health of the U.S. manufacturing and services sectors in a set of economic data and earnings reports Friday.
IHS Markit is set to release its preliminary February U.S. purchasing managers’ index (PMI) at 9:45 a.m. ET.
Consensus economists expect the manufacturing PMI will pare back slightly to 51.5 from January’s three-month low of 51.9 in January. The services PMI will likely hold steady at 53.4, according to consensus estimates. Readings above the neutral level of 50 indicate expansion.
Some firms, however, had somewhat lower expectations.
“Markit manufacturing and services PMI should modestly pull back in February to 51.0 and 53.0 respectively amid the shock from the coronavirus outbreak,” Bank of America analysts wrote in a note Friday.
But earlier this week, two regional Federal Reserve manufacturing surveys handily topped expectations, underscoring the U.S. manufacturing sector’s ability so far to shake off any fall-out from the coronavirus outbreak. On Thursday, the Philadelphia Fed Business Outlook survey rose to a three-year high of 36.7 in February, well above the 11.0 print expected, as new orders jumped by the most since May 2018.
Meanwhile, Deere & Co. is also slated to release earnings results Friday, providing a single-company perspective on the health of the U.S. manufacturing sector from a closely watched bellwether.
The company is expected to report earnings of $1.25 per share on sales of $6.28 billion for its fiscal first quarter of 2020. On the top line, that would represent a year over year decline of 9.5%.
The results come on the heels of weaker-than-expected results from peers including AGCO Corporation (AGCO) and CNH Industrial (CNHI), portending potentially weak results for the Illinois-based heavy equipment-seller. And last quarter, Deere offered a weak outlook for 2020, saying it expected agricultural equipment sales would fall between 5-10%. Construction equipment sales were expected to decline by as much as 15% in 2020, Deere said at the time.
That guidance, however, had come as the U.S. and China were still locked in a trade war, with tensions between the two countries having since receded with the signing of a phase one trade agreement in January.
Shares of Deere were up 3.7% over the past 52 weeks through Thursday’s close, sharply underperforming against the S&P 500’s 21% gain over the same period.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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