The U.S. stock market will likely get off to a soft opening this morning, as a new week on Wall Street begins. As we were posting this report, the S&P 500 Index futures were off about 20 points (-0.30%) in pre-market trading. In the coming days, traders will turn their attention to the corporate sector, as the third-quarter earnings season continues to take shape. The upcoming Presidential election and tensions in the Middle East will also probably be topics of conversation.
In economic news, this week should be relatively unexciting. However, there will still be a few items to watch. Specifically, we will get a look at the new and existing home sales figures, the Federal Reserve’s Beige Book summation, the weekly jobless claims, and a durable goods report. In addition, numerous Fed officials will be making presentations throughout the week.
In corporate news, the third-quarter earnings season is now in full swing. We have already heard from numerous banks and financial institutions. This week, we will receive reports from a wide assortment of companies. Today, we hear from Nucor (NUE), which is one of the nation’s leading steel manufacturers. Tomorrow, General Motors (GM), 3M Company (MMM), and Lockheed Martin (LMT) will weigh in with results. Meanwhile, on Wednesday Tesla (TSLA) will post its numbers. Tesla is still the largest electric vehicle manufacturer in the U.S., with close to 50% market share. In addition to current sales figures and profit margins, investors will be looking for information about the company’s emerging autonomous driving technology, which many think may become a critical part of the automotive business. Tesla is a widely held issue, and its report can easily have an impact on the market.
From a technical perspective, the stock market continues to drift higher, as we move through October. We have noticed that equity sector participation has become much broader, which is encouraging. For instance, the utilities have been displaying leadership lately. These stocks, which are generally held for income, may be moving higher in anticipation of a lower-interest-rate environment. However, the group may also be getting more attention from investors, as it now seems clear that large amounts of power will be needed to run technology data centers, especially given the advances in the artificial intelligence (AI) arena. The basic materials issues and financials have also been helping to lift the market. - 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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