The U.S. stock market seems positioned to move higher at the opening bell this morning, as traders look to extend last Friday’s gains. As we are publishing this report, the S&P 500 Index futures were ahead about 22 points (0.40%) in early morning trading. This week, investors will be focused on the nation’s employment situation, as well as the retail sector. Developments in Washington, such as any further tariff announcements, will also likely be scrutinized by traders.
There are a handful of economic releases slated for this week. However, the most important issuance is scheduled to take place on Friday morning when the government delivers the monthly employment report. Analysts currently think that roughly 160,000 jobs were added to the economy in February, up from the 148,000 figure logged in January. The unemployment rate is expected to come in at 4.1%, which would be a relatively stable reading. Hourly wages will also be closely monitored for signs that inflationary pressures may be mounting. The employment report is considered to be one of the most important economic releases, and it certainly has the potential to move the stock market. Federal Reserve Chairman Jerome Powell will also be delivering a speech on Friday, and his remarks will not likely go unnoticed.
Meanwhile, a number of notable retail corporations will report results this week. In the coming days we will hear from Target (TGT), Best Buy (BBY), Costco (COST), and Kroger (KR). Here, investors will be looking for signs that the consumer is still in good shape. In the technology arena, we will also hear from a few leading issuers.
From a technical perspective, the stock market was quite volatile during the month of February. The S&P 500 Index managed to hit a record high in the middle of the month, but then promptly retreated. After several days of selling, last Friday the market staged a rally attempt. However, it remains to be seen if the bulls can mount a sustained buying campaign in the days ahead. Pushing the S&P 500 Index back above the 6,000 mark, and over its 50-day moving average, will likely be the next major challenge for traders. Meanwhile, sector rotation remains a dominant market theme. Investors continue to move capital out of the technology issues, and into healthcare stocks, financials, and consumer names. It is not clear if this will be a permanent development, or simply a temporary move. It is worth mentioning that the technology sector contains many of the largest publicly-traded issues, as measured by market cap, and it may be hard for the major averages to advance without contributions from these stocks. – 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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