The U.S. stock market is set to move lower this morning, as Russia’s invasion of Ukraine continues to dominate the headlines. The recent hostilities—and the harsh sanctions that have been placed on Russia in response—are weighing on the global financial markets and dampening investor sentiment. On our shores, traders will be keeping a close eye on the situation overseas, while also focusing on the domestic economy, the inflation outlook, and the Federal Reserve’s course of action.
In economic news, there are few major reports due out today. However, the Chicago Purchasing Managers Index (PMI) for the month of February will be released this morning. This issuance is of importance, as it details the health of the manufacturing sector in the broader Chicago region. Tomorrow, the Institute for Supply Management (ISM) will deliver its manufacturing report, which should provide a broader measure of the economy. In addition, we will get a look at the latest construction spending numbers. Of note, investment in construction tends to be aligned with gross domestic product (GDP) and is a key figure to watch. Looking ahead, the government will deliver the February employment report on Friday morning. The Federal Reserve looks closely at the nation’s employment situation, as well as the latest inflation data, as it crafts its monetary policy. The central bank is set to meet in mid-March, and most investors expect that an interest-rate hike will be passed.
Meanwhile, in the corporate arena, Zoom Video Communications (ZM), a leader in digital conferencing, weighs in with its report after the market closes today. Here, investors will want to see that business is still progressing and that the outlook remains promising, even as pandemic-related restrictions diminish, the corporate sector reopens, and competition in the digital video arena starts to intensify. Tomorrow, we will hear from Target (TGT); that report may illustrate how inflation and supply-chain disruptions are impacting the broader retail sector. Salesforce.com (CRM), a key provider of enterprise solutions, will also be posting its numbers.
From a technical perspective, stocks have not performed well during the first two months of the year. Specifically, the broader S&P 500 Index is now sitting below its 200-day moving average, located around the 4,460 mark. Although the index is off roughly 8% for the year, it should be noted that many stocks, especially in the technology sector, have dropped considerably more than the broader market. Clearly, the environment is difficult, and investors will probably remain on edge for a while.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
