Before The Bell
The U.S. stock market put in a constructive session yesterday, starting off the new week on an upbeat note. Investors remain optimistic, thanks to a solid third-quarter earnings season, encouraging October employment numbers, and the release of new coronavirus medicines. Overnight, the global markets have been struggling. In Asia, the Nikkei delivered a weak performance. In Europe, the FTSE 100 has also had difficulty making progress. On our shores, the equity futures are mixed to down slightly, which may indicate a soft start to the day.
In economic news, inflation returns to the spotlight this week. Today, we get a look at the Producer Price Index (PPI) for the month of October. Tomorrow, the Consumer Price Index (CPI) will follow. No doubt, traders will be closely watching these reports for signs that inflation could be intensifying. In the corporate sector, numerous companies have been battling higher costs for raw materials, energy, and labor, and have hiked product prices, accordingly. Meanwhile, in the consumer sector, inflation could eventually put a damper on sentiment and potentially create challenges for customers and businesses. It is not yet clear if the current situation will moderate, or persist well into 2022. However, if the current environment persists it will likely be of concern to the Federal Reserve, and could even prompt a shift in monetary policy. Tomorrow, we will also get a look at the latest weekly jobless claims, which should receive some attention.
In the corporate arena, the third-quarter earnings season continues to move along. Of note, most of companies that have already reported have delivered impressive results. However, it should be noted that annual comparisons have been relatively easy, as the pandemic pressured business for much of last year. Yesterday after the market closed, we heard from PayPal Holdings (PYPL), which is one of the largest names in the digital payment space. That report was somewhat mixed, and the stock is moving lower in pre-market trading. Today, we will hear from Coinbase Global (COIN), a technology company serves the emerging crypto-currency marketplace. Later in the week The Walt Disney Company (DIS) weighs in with its report.
Technically, the stock market has staged a dramatic rally over the past couple of weeks. The S&P 500 Index is now sitting at the 4,700 mark, and many traders are likely wondering if there are further gains in store. It should also be mentioned that the holiday season is rapidly approaching and that could influence trading on Wall Street in the weeks ahead.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
