The U.S. stock market seems set to move higher this morning, as traders prepare for a busy week ahead. In the coming days, investors will receive numerous important economic releases, as well as a large batch of third-quarter corporate profit reports. As we were writing this update, the S&P 500 Index futures were ahead about 25 points (0.45%) in pre-market trading. Also this morning, the price of crude oil was trading about 6% lower, to $67 a barrel, reflecting reduced military tensions between Israel and Iran.
In the economic arena, there are no major reports scheduled today. However, tomorrow the Conference Board will release the monthly Consumer Confidence Index. On Wednesday, the advanced estimate for third-quarter GDP (gross domestic product) will be published. Here, analysts think that the economy expanded at an annualized rate of 3.2% during the quarter, which would be a healthy reading. On Thursday, we will get a look at the PCE (personal consumption expenditures) Price Index. The report will probably show that prices rose about 2.1% for the month of September (year over year), putting inflation quite close to the Federal Reserve’s target range. Finally, on Friday morning the government will post the monthly employment report. It is widely expected that roughly 110,000 jobs were added to the economy in October, down significantly from the prior month’s reading. The unemployment rate is expected to remain unchanged at the 4.1% mark.
This week we will receive profit reports from numerous widely-held technology companies. Tomorrow, we will hear from Alphabet (GOOG) and Advanced Micro Devices (AMD). On Wednesday, Microsoft (MSFT) and Meta Platforms (META) will weigh in with their results. On Thursday, Apple (AAPL) will be the center of attention, with investors looking for signs that the company’s recently-launched artificial intelligence applications are making progress. Amazon.com (AMZN) will also be announcing its numbers.
From a technical perspective, the stock market is sitting close to record-high territory. However, stocks have traded in a choppy fashion over the past several weeks, suggesting that traders may be fatigued. For perspective, the S&P 500 Index is up over 20% so far this year, and some investors might wonder if further gains can be achieved from these levels. Many stocks seem extended technically, and valuations look stretched. Also, dividend yields may not look as attractive, now that the yield on the 10-year Treasury bond has moved back above the 4.0% level. – Adam Rosner
At the time of this article’s writing, the author had positions in Alphabet, Apple, and Amazon.com.
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