The U.S. stock market seems set for a lackluster opening this morning, as investors get ready for another busy week. Currently, the broader market futures are relatively flat, which suggests a mixed start at the opening bell. In addition, political problems overseas are becoming more pronounced, which could weigh on sentiment. Otherwise, over the next few days, traders will likely be focused on the corporate profit outlook, the latest inflation data, and the Federal Reserve’s evolving monetary policy.
On the economic front, there are no notable reports due out today. Tomorrow, the Producer Price Index (PPI) for the month of January will be released, which should receive a good deal of scrutiny, especially after last week’s Consumer Price Index (CPI) showed prices rising at a dramatic pace. Needless to say, this information did little to bring calm to the markets, and given the current situation, it is widely anticipated that the Federal Reserve will choose to lift interest rates at the March meeting. Based on the recent data, some investors now think that the increase could be sizable. However, it should be mentioned that the central bank has been quite accommodative, and may not act too aggressively, as it wants to avoid putting pressure on the economy. Meanwhile, on Wednesday we will get a look at the retail sales figures for January. Investors will likely be reviewing this report, given the important role the consumer plays in the broader economy.
Meanwhile, the corporate earnings season is not yet over. Today, we will hear from Advance Auto Parts (AAP), while tomorrow, the broader hotel and gaming sector will be in the spotlight, with reports due out from Marriott International (MAR) and Wyndham Hotels and Resorts (WH). These issuances will be of importance, as the travel and lodging industry has been severely impacted by the coronavirus pandemic and investors will want to see signs of improvement.
From a technical perspective, stocks have been quite volatile lately. A bout of selling that took place late last week sent the broader S&P 500 Index back below its 200-day moving average, located around the 4,450 level. Hopefully for the bulls, the market can find some support at this point, but the climate remains quite challenging, and it may take a while before traders regain their sense of conviction.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
