The U.S. stock market seems poised for a constructive start this morning, as a new week on Wall Street begins. In addition to the military and political developments taking place overseas, the domestic economy and the corporate profit outlook will be carefully followed by traders this week.
In economic news, a number of important reports will be released over the next few days, starting with the Consumer Confidence Index for the month of March tomorrow. So far, the consumer has remained relatively optimistic, despite mounting inflationary pressures and a higher interest-rate outlook; investors will be looking to tomorrow’s release to see if that remains true. On Thursday, the PCE (Personal Consumption Expenditures) Price Index for the latest recorded month will be released. Many traders will be looking over this report as well, as it is often tracked by the central bank and may well influence monetary policy decisions. Finally, on Friday, the government will post the March employment numbers. Doubtless, most investors would like to see a vibrant labor market and a thriving economy. However, if the employment report is too strong and is accompanied by upward wage pressure, the Federal Reserve—which has taken a balanced approach until now—could opt for more aggressive measures at its next meeting.
In corporate news, few widely-followed companies will be reporting results today. Tomorrow, we will hear from Micron Technology (MU), a leading semiconductor name and a bellwether for the industry. Here, investors will be looking to see how electronics manufacturers have been coping with the ongoing labor shortages and supply-chain disruptions that have been pressuring the technology industry. In addition, Lululemon Athletica (LULU) will weigh in with its numbers. This report will be of importance, as it should provide a look into the broader retail apparel industry. Notably, the first quarter of 2021 comes to a close this week, and some corporations may revise their guidance and reset expectations before the reporting season starts.
From a technical vantage point, the stock market has staged a sizable recovery over the past several sessions. The S&P 500 Index is now trading above its 200-day moving average (situated near the 4,480 mark), while the NASDAQ likewise seems to be acting a bit better. Of note, many technology names that encountered intense selling pressure a few months ago have since stabilized, and some have even started to advance again. This development should help support the broader stock market and lift investor sentiment.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
