Before The Bell
The U.S. stock market retreated late in the session yesterday, but seems positioned to recapture some of that ground today. Overnight, the international markets traded in a mixed fashion. In Asia, the Nikkei moved lower, but in Europe, the FTSE 100 held up somewhat better. On our shores, the futures are up sharply, signaling a higher opening.
Meanwhile, investors are hoping that a stimulus package can be agreed upon before the November election. Talks have been taking place between Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin, and there have been reports that some progress has been made. Clearly, Wall Street would like to see an agreement reached, as it would provide funds to Americans, lift consumer sentiment, and support the economy. Meanwhile, investors are also monitoring the coronavirus pandemic, as the number of cases around the nation, and across the globe, have started to move up sharply again. Unfortunately, a flare up would be a setback for the nation’s economy, which is now starting to regain some of its footing. On a related note, a few leading pharmaceutical companies have vaccine candidates moving further through the trial process, and a positive outcome on this front would likely be well received by Wall Street. Finally, investors are keeping an eye on the upcoming Presidential Election, as President Donald Trump is slated to debate contender former Vice President Joe Biden on Thursday night. Some investors may be starting to reposition their portfolios ahead of the election. It would not be surprising to see capital rotate out of high-flying technology names and into value-oriented stocks, as managers look to reduce volatility.
In economic news, today housing starts and building permits for the month of September will be in focus. Tomorrow, the Federal Reserve will release its Beige Book summation for the month of September. However, for the time being, the economy may be less of a concern for traders, now that the third-quarter earnings season is under way. After the market closed yesterday, technology giant International Business Machines (IBM) posted somewhat mixed results, and that stock is moving lower in pre-market trade. This morning, Procter & Gamble (PG) delivered better-than-anticipated numbers and boosted its outlook. That stock seems poised to open higher, as a result. Later today, Netflix (NFLX) posts its numbers after the market closes.
Technically, equities got off to strong start in October, but pulled back over the past several sessions. The S&P 500 Index is now sitting just above its 50-day moving average, located around the 3,400 mark. Hopefully for the bulls, this key level will provide some support.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
