Before The Bell
The U.S. stock market moved nicely higher yesterday, with all of the major averages making healthy contributions. Notably, investors seem more optimistic about the corporate profit outlook and a bit less worried about other issues, such as the coronavirus pandemic, inflation, higher interest rates, and political gridlock in Washington, D.C. Overnight, the international markets have been making strides. In Asia, the Nikkei posted solid gains. In Europe, the FTSE 100 has been moving ahead, as well. On our shores, the equity futures are pointing upward, which implies a favorable start to the session.
In economic news, a number of key reports are due out this week. Today, we get a look at the new home sales figures for the month of September. In addition, the Conference Board’s Consumer Confidence Index for the month of October will be released today. Later in the week, the advanced estimate for third-quarter GDP will be published, and that item will be closely watched by Wall Street.
In the corporate arena, the third-quarter earnings season is now in full swing. So far, the results have exceeded expectations. However, it should be noted that many financial institutions posted their results at the very start of the season, and we are now starting to hear from a more diverse collection of companies. These issuances should provide a broader view of the corporate sector. Investors will clearly be wanting to see how companies have been coping with rising inflationary pressures, supply-chain disruptions, and labor shortages. Yesterday, after the market closed we heard from Facebook (FB). Investors seemed pleased with the social media giant results, as that stock is higher in pre-market trading. Today, after the market closes, Microsoft (MSFT) will put out its results. Later in the week, Coca-Cola (KO) will weigh in with its numbers.
Technically, the stock market has staged a considerable rebound over the past several trading sessions. Not only has the S&P 500 Index recovered the ground lost during the recent pullback that started a few weeks ago, but it has also managed to make its way to new high ground. It remains to be seen if the bulls can drive stocks higher from the current levels. Much will depend on the numerous corporate reports that still have yet to be released. In addition, traders will be watching the Federal Reserve, as inflation now seems to be a more pronounced concern.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
