The U.S. stock market looks to get off to a tentative start this morning, as traders brace themselves for a busy week. In the days ahead, investors will receive a key inflation report, as well as a major policy decision from the Federal Reserve. As we were writing this piece, the S&P 500 Index futures were down about three points (-0.05%) in pre-market trading. The NASDAQ futures, however, were under a bit more pressure.
As noted, traders will receive some important economic news this week. Tomorrow, the Consumer Price Index (CPI) for the month of November will be released, and this issuance should be carefully scrutinized. Most economists think the numbers will show that prices rose about 3% for the month (year over year), versus the 3.2% increase logged in October. This reading, while still higher than the Federal Reserve would prefer, would be a step in the right direction. Also this week, the FOMC (Federal Open Market Committee) will hold its two-day policy meeting, which will conclude on Wednesday afternoon with an interest-rate decision. Most investors do not expect that the central bank will choose to lift rates at this juncture. However, some detailed economic projections will be presented, and Chairman Jerome Powell will also offer prepared remarks to the press. It should be noted that some analysts are anticipating that the Fed may cut interest rates sometime in 2024, but it is unlikely that the lead bank will provide any confirmation of that notion at this time.
In the corporate arena, a few widely followed companies are slated to present quarterly profit reports this week. Today, we will hear from Oracle (ORCL), a leading enterprise technology provider. On Wednesday, Adobe (ADBE), a designer of creative media software, will weigh in with its numbers. Later in the week, we will hear from Costco Wholesale (COST), one of the nation’s largest discount retailers.
The stock market rally remains intact, for now. The S&P 500 Index has just reached the 4,600 level, and is sitting at new 52-week high ground. However, it should be noted that stocks have risen sharply over the past month, and some caution may be warranted here. It should be mentioned that investor sentiment may be getting “overly” bullish, as measured by the low readings now being recorded on the CBOE Volatility Index (VIX). – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
CLICK HERE for more information on our services or call 1-800-VALUELINE (1-800-825-8354). Our account managers are available Monday through Friday, 8:00 AM to 6:00 PM Eastern Time.
