The U.S. stock market seems set to move lower this morning, as traders brace themselves for a busy week ahead. As we were publishing this piece, the S&P 500 Index futures were down about 58 points (-1.05%) in pre-market trading. In the coming days, investors will receive a number of important economic news items, including a key employment report. In addition, Wall Street will be eagerly waiting to see what trade tariffs President Trump will put in place this Wednesday (an event dubbed “Liberation Day”).
In economic news, there are no major reports scheduled for today. Tomorrow, the ISM (Institute for Supply Management) Manufacturing Index for the month of March will be published. The ISM Services Index will follow on Thursday. These reports are considered leading economic indicators and should be closely watched by investors. Meanwhile, the big labor market news this week will take place on Friday morning when the government releases the monthly Employment report. Analysts currently think the numbers will show that roughly 140,000 jobs were added to the economy in March, down from the 151,000 figure logged in February. The unemployment rate is expected to stay unchanged near the 4.1% mark. Investors will also want to see that wages have been holding steady.
In the corporate sector, a number of smaller companies will be posting results this week. Among the widely held issues, we will hear from Conagra Brands (CAG) and Guess?, Inc. (GES). Next week will mark the start of the first-quarter earnings season. A handful of prominent financial institutions will weigh in with their results and provide guidance for the remainder of the year.
Technically, stocks started to rally early last week, but promptly retreated. This dynamic suggests that investors are still feeling skittish, and are not yet ready to buy stocks with much conviction. It should be noted that the S&P 500 Index is now back below its 200-day moving average (around 5,760). This development will likely be seen as a sign of weakness by followers of technical analysis. From here, it is not certain when the bulls might regain control of the market. It is also not clear what might serve as the catalyst needed to lift sentiment. At this point, traders may want to see that the economy is not slowing, and that corporations can continue to expand. Many investors might also feel better about equities if the Federal Reserve were to signal a readiness to cut interest rates. – 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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