The U.S. stock market seems set for a lower opening this morning, as another turbulent week on Wall Street begins. At the time that we were writing this update, the S&P 500 Index futures were off about 80 points (-1.10%) in pre-market trading. In the coming days, investors will receive a key inflation report, as well as a handful of notable corporate profit releases. In addition, traders will be looking to see if the Trump Administration will announce more tariffs this week. Wall Street has grown increasingly worried that these trade restrictions may put a damper on the nation’s economy.
In economic news, few reports are scheduled for today or tomorrow. On Wednesday, the Consumer Price Index (CPI) will be announced. Analysts currently think the numbers will show that consumer prices rose about 2.9% during the month of February, year over year. The core reading (excludes volatile food and energy prices) is expected to show a roughly 3.0% increase. On Thursday, we will get a look at the PPI (Producer Price Index), which measures prices on the wholesale level.
In the corporate arena, a handful of notable companies will be posting results in the coming days. Today, we will hear from Oracle (ORCL), a leading software provider. Later this week, Adobe (ADBE) will weigh in with its numbers. We will also receive reports from Dollar General (DG) and Ulta Beauty (ULTA).
The stock market appears to be at a critical junction. The S&P 500 Index is down about 6% from the high-water mark reached in February and is hovering just above its 200-day moving average (located around 5,735). Many followers of technical analysis would view a move down from current levels as a bearish signal. It should also be noted that the NASDAQ recently fell over 10% from its highs, briefly entering correction territory. From a sector perspective, a handful of equity groups (financials, healthcare, and consumer issues) have managed to buck the downtrend, which has helped prop up the broader market averages. However, it is quite possible that these stocks will eventually encounter selling pressure. Finally, sentiment has turned negative. The CBOE Volatility Index (VIX), Wall Street’s fear gauge, is now near the 25 mark, which is a somewhat elevated figure. High readings on the VIX are used as a contrarian indicator and may signal that the market is oversold and due for a bounce. – Adam Rosner
At the time of this article’s writing, the author had a position in Oracle.
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