Stocks got the week off to a strong start, but the futures are suggesting the major indexes may give back some of those gains at today’s open. In overnight trading, markets in Asia closed mostly higher. Meanwhile, the major European exchanges are all showing gains. Elsewhere, oil prices are lower, with West Texas Intermediate down about 0.9%, to around $76.10 a barrel.
Corporate earnings season continues to move along at a brisk pace and, so far, the majority of results have topped expectations. This week, we’ll hear from a number of big tech names including heavyweights Microsoft (MSFT) and Alphabet (GOOG), which are set to announce after today’s close, with Apple (AAPL) and Amazon.com (AMZN) reporting on Thursday. Reports before the open today include General Motors (GM), whose earnings in the fourth quarter exceeded expectations; the manufacturer did express uncertainty about the pace of growth in electric vehicles.
On the economic front, the main event this week is the Federal Open Market Committee’s (FOMC) meeting, which wraps up on Wednesday. The consensus on Wall Street is that the Federal Reserve will leave its overnight lending target rate unchanged, at 5.25%-5.50%. Notably, hopes for a rate cut as early as May remain strong, with Fed-funds futures suggesting a better than 85% chance for a reduction of at least a quarter percentage point.
Meanwhile, this morning brings us the latest Job Openings and Labor Turnover Survey (JOLTS) results from the Bureau of Labor Statistics. Analysts are looking for December’s reading to ease a bit, to around 8.75 million, versus 8.79 million the month before. This will be followed up on Thursday with the Department of Labor’s release on initial jobless claims, where consensus is calling for a slight downtick, to 210,000, versus 214,000 last week. That same day, the Institute for Supply Management will announce its Purchasing Managers Index (PMI) for January. Wall Street is calling for the reading to come in flat with December’s, at 47.4%. (Figures above 50 denote expansion, while those below 50 indicate contraction.) If correct, it would mark the 15th consecutive month of declining activity.
On Friday, the Bureau of Labor Statistics gives us more data points on the employment front, with its report on nonfarm payrolls for January widely expected to show about 173,000 positions added, down from 216,000 in December. Additionally, most are calling for a slight increase in the unemployment rate, to about 3.8%, versus 3.7% the month before.
Summing up Monday’s moves for the major indexes, the Dow Jones Industrials gained 224 points, or 0.6%, the S&P 500 added 36 points (0.8%), and the tech-heavy NASDAQ led the pack advancing 172 points (1.1%). - Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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