The U.S. stock market seems poised for an upbeat start this morning, after a generally constructive session yesterday. As we were preparing this report, the S&P 500 Index futures were ahead about 26 points (0.44%) in pre-market trading. The NASDAQ futures were also pointing to healthy gains, after the Taiwan Semiconductor Manufacturing Company (TSM) delivered a strong report and provided encouraging guidance. Shares of the technology giant are set to open higher, and will likely fuel a rebound in the broader semiconductor space today.
In economic news, a couple of notable reports were just released. Initial jobless claims for the latest reported week came in at 241,000, down from the prior week’s figure, and also a bit better than analysts had expected. It should be noted that recent claims figures have been distorted, due to problems associated with Hurricane Helene. In general, we think the nation’s employment situation remains in good shape, as was suggested by the solid September non-farm payroll numbers. Meanwhile, it was just announced that U.S. retail sales rose 0.4% during the month of September, which was a constructive reading. Many investors see the retail sales report as an important indicator, since consumer spending accounts for a major part of the nation’s economy. Later today, we will get a look at the latest monthly industrial production numbers.
In corporate news, the third-quarter earnings season is now underway. So far, we have heard from a number of big banks and financial institutions. Generally, the reports have been quite supportive, and have done much to boost investor sentiment. Later today, we will receive a report from Netflix (NFLX). Tomorrow, American Express (AXP) will weigh in with its numbers. It is critical that corporations deliver healthy results at this point, as many equities are trading at elevated valuations.
From a technical vantage point, the stock market has been performing well, with the S&P 500 Index not far from high ground. It should be noted that stocks have already advanced quite a bit over the past few weeks, and it remains to be seen if further gains can be achieved without a period of consolidation. From a sector perspective, the technology stocks are holding up well. However, the financials, industrials, and basic materials issues have also started to display some leadership, suggesting broader participation. – 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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