Before The Bell
The U.S. stock market pressed ahead yesterday, with notable gains on the NASDAQ. Investor sentiment remained upbeat, thanks to a better-than-expected third-quarter earnings season and an improved corporate outlook. However, overnight the international markets have turned lower. In Asia, the Nikkei delivered a weak session. In Europe, the FTSE 100 has also been losing ground. On our shores, the major equity futures are mixed-to-positive, which may suggest a constructive start to the trading day.
In economic news, there are no major economic reports scheduled for today. However, the pace should pick up in the days ahead. Tomorrow, the FOMC will wrap up its two-day meeting, and weigh in with an interest-rate decision. Some prepared remarks will also be provided. In addition, Automatic Data Processing (ADP) is slated to release its monthly employment report, and that issuance should receive some attention. Meanwhile, the big news will come at the end of the week. On Friday morning, the government will deliver the nonfarm payroll numbers for the month of October. This event will be widely watched by Wall Street, and some short-term traders may even position their portfolios in advance of the news. Most analysts would like to see the economy and labor market continue to expand, but at a measured pace. In this way, the Federal Reserve may not see an urgent need to lift interest rates or alter its policies. Meanwhile, inflationary pressures, previously thought to be transitory, have persisted, and this will also influence the current monetary policy.
In the corporate arena, the third-quarter earnings season continues. Of note, most companies have exceeded expectations, despite a challenging climate. This morning, we heard from Pfizer (PFE), which is one of the largest and most important names in the pharmaceutical arena. The company posted better-than-expected results and provided a solid outlook, driven by demand for its coronavirus vaccine. On a related note, we will also receive a results from Amgen (AMGN) later in the day. On Wednesday, Marriot International (MAR) will weigh in with its report, which should provide insight into the lodging industry.
Technically, the stock market staged a sizable recovery during the month of October. Looking ahead, it remains to be seen if the bulls can keep their buying campaign in place, especially as the third-quarter earnings season tapers off. It should be noted that the holiday season will soon be starting up, and assuming the mood remains upbeat, that may well be a plus for the market.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
