The U.S. stock market seems set for a constructive start this morning, as traders ready themselves for another week on Wall Street. As we were composing this report, the S&P 500 Index futures were ahead about 12 points (0.26%) in pre-market trading. In the days ahead, investors will be concentrating on the corporate sector, as the third-quarter earnings season starts to take shape. In addition, the military conflict taking place in the Middle East is of concern for many reasons. From a market viewpoint, the nations in the region account for much of the world’s oil production, and an escalation of the situation could lead to higher energy prices.
In economic news, there are no major releases slated for today. However, tomorrow the retail sales figures for September will be reported. This issuance provides a closer look at the health of the economy, as it tracks consumer demand across various retail categories. Later in the week, the housing market will be an area of focus. Specifically, on Wednesday we will get a look at housing starts and building permits for the month of September, followed by the monthly existing home sales figures on Thursday. The housing sector is a vital part of the broader economy, and it remains to be seen if higher mortgage rates will create significant challenges in this area.
On the corporate front, the third-quarter earnings season commenced last week, with a handful of large banks, including JPMorgan Chase (JPM), reporting results. This week we will hear from Bank of America (BAC) and Goldman Sachs (GS). Many banks and financial institutions seem to be holding up reasonably well in the current climate, and the liquidity crisis that threatened the regional banking sector several months ago appears to be under control. Later this week, we will receive a report from Tesla (TSLA), the leading electric vehicle manufacturer in the country. In addition, Netflix (NFLX), the most popular streaming media provider, will post its numbers. Many investors will be paying attention to Netflix’s report, as many other companies in the streaming sector have faced challenges.
From a technical vantage point, the S&P 500 Index attempted to rally in early October, but recently encountered resistance. The major market average is now not far below its 50-day moving average (located at the 4,400 mark). Pushing stocks above this key technical level will likely be the next challenge for the bulls. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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