The U.S. stock market may come under some pressure this morning, even though traders should be somewhat relieved that an agreement was reached over the weekend that will prevent the government from a debilitating shutdown. As we enter the month of October and the final quarter of 2023, the S&P 500 Index futures had been moving higher earlier, but have since slipped into negative territory. Many issues of concern, including the United Auto Workers (UAW) strike, remain, notwithstanding passage of the stopgap measure to keep the federal government open.
In economic news, a few important items are scheduled for this week. Later today, the ISM (Institute for Supply Management) Manufacturing Index for the month of September will be released. In addition, we will get a look at the latest monthly construction spending figures. Tuesday should be relatively quiet. However, the pace picks up on Wednesday, with the arrival of the ISM Services Index, and the latest monthly Factory Orders report. Meanwhile, the main event will take place at the end of the week. Friday morning, when the government will deliver the September employment numbers, which is a report that could potentially move the markets, one way or the other. Most analysts think the numbers will show that around 170,000 jobs were added to the domestic economy, and that the unemployment rate dipped to 3.7%, during the month. The Federal Reserve, which is still quite concerned about inflation, would like to see a slightly softer labor market than we have had, as well as reduced upward pressure on wages.
In the corporate arena, a handful of widely-followed corporations will be releasing their results this week. On Tuesday, Cal-Maine (CALM), a leading supplier of farm fresh eggs, will post its numbers. On Thursday, Constellation Brands (STZ), a distributor of alcoholic beverages, and Conagra Brands (CAG), a popular branded foods company, will weigh in with reports.
From a technical view point, the S&P 500 Index ran into some resistance at the end of the last quarter. It is likely too early to tell how the final months of the year will develop. However, it should be noted that historically the stock market tends to make progress as the year draws to a close. Clearly, traders will be paying attention to the third-quarter earnings season, which is set to begin shortly. Although the environment looks challenging, a batch of better-than-anticipated reports could provide the catalyst needed to push stocks higher from here. – 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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