Before The Bell
Another day, another morning's rise for the U.S. stock market. Optimism that perhaps we have seen the worst of the economic travail stateside, as the data continue to come in mixed, and hopes that the two sides in Congress will reach a deal to combat the worst economic effects of the coronavirus are still keeping spirits up on Wall Street. Hence,, stocks rose on Monday and pushed higher in the early going yesterday, as well, as the Dow Jones Industrial Average rose by some 130 points as the lunch hour arrived on Wall Street.
Leading the way higher, once more, were shares of tech stalwart Apple Inc. (AAPL). That issue, which has surged in recent days following news of a pending four-for-one stock split, rose again yesterday after a report had the tech giant expressing interest in buying video app TikTok. Apple quickly denied such interest.
As to other news, it was reported that factory orders had risen by 6.2% in June, an advance which signaled that the U.S. manufacturing recovery was still intact as the first half concluded. Such strength followed the issuance of data the day before in which it was reported that domestic manufacturing had increased in July, following gains in May and June. Those reports precede the release of the latest survey from the Institute for Supply Management on non-manufacturing activity later this morning. Strength here, too, is expected.
However, the big news of the week from an economic perspective will be Friday's release of the July tallies on employment and unemployment. That issuance from the U.S. Department of Labor, could well be a market mover. Slight month-to-month improvement in job growth and the jobless rate are likely, in our view. Before that, tomorrow will bring the weekly report on first time jobless filings. Such job losses have risen for two weeks in a row after declining steadily for some four months.
Following generally narrow advances by the U.S. equity futures last evening and ahead of key economic reports today, tomorrow, and Friday, the equity futures now are pointing to a nicely higher opening when trading resumes at 9:30 AM (EDT). Finally, one stock to look at this morning is Dow component Walt Disney (DIS). The entertainment behemoth reported better-than-expected quarterly earnings after the bell yesterday. Specifically, the company inked a small profit whereas a loss had been forecast. The shares are up notably in the pre-market.
Finally, gold is on the rise once again, selling for a record high on talk that the Federal Reserve may try to lift the rate of inflation in the coming months. Such an effort, along with a likely stimulus package, could give a lift to prices following years of muted inflation.
- Harvey S. Katz, CFA
At the time of this article's writing, the author had positions in AAPL.
