The U.S. stock market seems set to move higher this morning, as traders get ready for an information-packed week. In the days ahead, investors will be focusing on the Federal Reserve’s monetary policy, the nation’s employment situation, and the corporate profit outlook. Overseas, the war between Israel and Hamas continues with no immediate resolution in sight. However, the situation seems contained, for now, and a broader regional conflict may well be averted. At the time that we were composing this piece, the S&P 500 Index futures were ahead roughly 26 points (0.65%) in pre-market trading.
In economic news, numerous reports are slated for this week. However, two items will be of particular importance. Specifically, on Wednesday the Federal Open Market Committee (FOMC) will conclude its two-day policy meeting with an interest-rate decision. Few analysts think that the central bank will lift rates at this juncture. Even though the economy is still holding up well, and inflation remains elevated, higher rates now could create systemic challenges in a number of areas. After the meeting, Chairman Jerome Powell will offer some remarks. Investors will be paying close attention to these comments and any guidance that might be provided. Looking further ahead, on Friday the government will publish the October employment report. Analysts currently think the numbers will show that roughly 175,000 jobs were added to the economy during the month, down from the September reading. The headline unemployment rate is expected to remain unchanged at the 3.8% mark. Analysts will be carefully looking to see if upward pressure on wages has started to cool, as this is an area closely monitored by the Federal Reserve.
In the corporate sector, the third-quarter earnings season marches forward. So far, we have heard from about half of the companies in the S&P 500 Index, and the reports have largely managed to exceed expectations. This week we will hear from a diverse batch of companies, including industrial equipment manufacturer Caterpillar (CAT), chemicals maker DuPont de Nemours (DD), and technology giant Apple, Inc. (AAPL). Given the size of Apple’s business, and the stock’s weighting in the major averages, this report has the potential to move the market.
From a technical perspective, stocks have encountered some resistance over the past few months. Specifically, the S&P 500 Index is currently down about 10% from the high-water mark reached in late July. It is not clear if the market will find support at the current level. However, stocks do tend to rally during the final weeks of the year. – 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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