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Day Ahead: Top 3 Things to Watch

Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.

1. New Home Sales Forecast to Tick Up

Housing data is on the economic calendar tomorrow, the part of the economy that’s been the most fragile.

The Commerce Department will report on new home sales for January at 10:00 AM ET (14:00 GMT).

On average, economists expect that sales of new single-family homes rose to a seasonally adjusted annual rate of 622,000, a tad higher than the pace of 621,000 from December.

On the labor front, weekly claims for first-time unemployment benefits come before trading at 8:30 AM ET.

Initial jobless claims are forecast to have edged up to 225,000 last week.

Last week saw a very anemic rise in February payrolls of just 20,000. But the jobless rate dipped again and wages grew more than expected, indicating some pricing power for workers as employers try to fill positions.

2. Dollar General, Adobe, Oracle to Report

While the first-quarter earnings season is starting to wind down, Thursday has some big reports.

Before the bell, Dollar General (NYSE:DG) is expected to report fiscal first-quarter earnings of $1.89 a share, up from $1.48 a year ago, analysts polled by Investing.com forecast. Revenue is projected at $6.6 billion, up 7.7% from a year ago.

After the close of trading, Adobe Systems (NASDAQ:ADBE) weighs in and is estimated to earn $1.62 in the fiscal first quarter, up from $1.55 a year ago. The consensus revenue estimate is $2.55 billion, up 22% from $2.08 billion a year ago.

Broadcom (NASDAQ:AVGO) is forecast to earn $5.23 a share in the fiscal first quarter, up from $5.12 a year ago. The chipmaker is expected to show revenue of $5.83 billion, up 9.6% from a year ago’s $5.33 billion.

Software giant Oracle (NYSE:ORCL) is forecast to earn 84 cents a share in the fiscal-third quarter, up one cent from the year-ago profit of 83 cents. Revenue is projected at $9.59 billion, down 1.9% from a year ago’s $9.78 billion. Nonetheless, shares are up 17.5% this year.

And Ulta Beauty (NASDAQ:ULTA), which operates a national chain of beauty salons and sells cosmetics and related products, is expected to earn $3.55 per share in the fiscal-fourth quarter, according to analysts polled by Investing.com, up from $3.40 a year ago. Revenue is forecast at $2.11 billion, up 8.8% from the same period a year ago.

3. Brexit Can Getting Another Kick?

U.K. lawmakers are set to gather in parliament for a third time this week to vote for a delay to Brexit on March 29.

There's little to suggest lawmakers will spring a surprise as the preceding two votes seen this week have played out as expected. U.K. Prime Minister Theresa May saw her revamped Brexit deal rejected on Tuesday and a day later lawmakers also voted against a no-deal Brexit.

Many are expecting lawmakers in Brussels to grant the U.K. a short delay to Brexit, but remain wary the EU could attached strings to an extension.

The length of an extension and the conditionality the EU attaches, if any, will determine the market response, senior economist at Aberdeen Standard Investments said.

Some analysts have warned investors to steer clear of U.K. equities and the pound as the eventual outlook on Brexit remains murky at best.

"(I)nvestors should remain cautious, and avoid chasing short-term rallies in sterling or increasing exposure to U.K. equities," UBS investment strategists said in a note.

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