Before The Bell
The U.S. stock market made considerable progress yesterday, as investors seemed less concerned about the Omicron coronavirus variant. According to recent reports, the new strain may be less debilitating than had been previously thought, even though it may be quite contagious. Overnight, the markets in Asia and Europe have been rallying, which is a constructive development. Moreover, on our shores, the S&P futures are now ahead roughly 60 points, which indicates a positive start to today’s session.
In economic news, relatively few reports are scheduled for today. However, this morning, we will get a look at the nation’s trade balance for the month of October. Tomorrow, the Energy Information Administration (EIA) is slated to publish the latest weekly crude oil inventory numbers. Given Wall Street’s concerns about rising energy prices, this issuance will probably be closely followed by traders. In addition, at the end of this week, the Consumer Price Index (CPI) for the month of November will be released. This report provides a broad measure of inflation and should receive some attention, as well. It should be noted that prices for goods and services continue to move higher, and the central bank no longer seems inclined to dismiss the problem as transitory. Greater clarity on this subject should emerge next week, when the FOMC wraps up its two-day meeting, and weighs in with an interest-rate decision and some prepared remarks. The Federal Reserve has suggested that it will look to taper its asset purchase program.
In the corporate arena, there are not too many major companies posting results this week. However, over the next few days we will hear from a small handful of names. For instance, GameStop (GME) and Campbell Soup Company (CPB) will report their results tomorrow. Lululemon Athletica (LULU) posts its numbers on Thursday. Meanwhile, the final quarter of 2021 will soon be drawing to a close, and some companies may start to revise their guidance for the rest of the year.
Technically, the stock market has been quite volatile over the past few sessions. Yesterday’s rally pushed the broad average back above the 50-day moving average, located around the 4,550 area. Lately, some traders have been rotating capital out of the high-flying speculative names and into the more traditional value-oriented stocks. Assuming this move continues, it may support the broader market, and is probably a healthy development.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
