The U.S. stock market looks set to open higher this morning, as a new week on Wall Street commences. In the days ahead, investors will receive a key inflation reading, along with numerous fourth-quarter profit releases. Meanwhile, President Trump continues to make various tariff announcements; this time, targeting steel and aluminum imports. In this case, Wall Street seems to be applauding the move. At the time that we were writing this piece, the S&P 500 Index futures were ahead about 30 points (0.50%) in early morning trading.
In economic news, there are no major reports scheduled for today and tomorrow. However, on Wednesday the January CPI (Consumer Price Index) will be released. Analysts currently think the numbers will show that consumer prices rose about 2.8% during the month (year over year). The core CPI (excludes volatile food and energy items) is expected to come in just over the 3.0% mark. Investors will likely pay close attention to these releases, as inflation has proven somewhat stubborn, and has yet to reach the Federal Reserve’s 2.0% target. On Thursday, the PPI (Producer Price Index), which measures wholesale prices, is set to be released. On Friday, investors will get a look at the January retail sales report, which is also an important issuance. It should also be noted that numerous Fed officials will be presenting speeches throughout the week, including Chairman Jerome Powell’s testimony to Congress.
Meanwhile, the fourth-quarter earnings season will be at the center of attention this week. This morning, McDonald’s (MCD) posted a mixed report, however investors seem to be shrugging off the news. Tomorrow, Coca-Cola (KO) is slated to deliver its results. On Wednesday, we will receive reports from CVS Health (CVS) and Cisco Systems (CSCO). Finally, on Thursday news from Applied Materials (AMAT) should shed light on the state of the semiconductor industry. So far, numerous companies have reported their results this earnings season. However, the market has not received too much of a boost, as investor sentiment seems somewhat muted.
Technically, the stock market has been moving in a sideways range for the past couple of months. This may reflect the fact that stocks had already advanced considerably in 2023 and again 2024. Further, investors may be taking a cautious approach, as equity valuations appear elevated and the Fed seems to be in no rush to lower interest rates. –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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