The U.S. stock market may get off to a mixed opening today, as a new week on Wall Street unfolds. At the time that we were preparing this article, the S&P 500 Index futures were down about eight points (-0.16%), while the NASDAQ futures were pointing higher. This week will be relatively busy, with investors acutely focusing on the Federal Reserve and the nation’s employment situation.
In economic news, no notable items are scheduled for today. However, tomorrow the ISM (Institute for Supply Management) Services Index for February will be released, along with the latest monthly Factory Orders report. On Wednesday, Federal Reserve Chairman Jerome Powell will provide testimony to Congress. Clearly, investors will be paying close attention, as they try to determine when interest rates might be reduced. Finally, on Friday morning the government is set to publish the monthly employment report. Analysts currently expect the numbers will show that roughly 210,000 non-farm jobs were added to the economy in February (which would be down from the sizable 353,000 figure posted in January). The headline unemployment rate is expected to remain unchanged at the 3.7% mark. Average hourly earnings will also be scrutinized for signs that wage inflation is moderating.
In the corporate sector, the fourth-quarter earnings season is largely complete, as nearly all of the companies in the S&P 500 Index have already reported their results. For the most part, the news has been supportive, with few indications that a corporate slowdown is on the immediate horizon. This week, we will receive reports from a number of retailers, including Costco Wholesale (COST) and Target (TGT). In addition, a few widely watched technology companies, such as Broadcom (AVGO) and Crowdstrike (CRWD), will weigh in with their numbers.
The S&P 500 Index continues to forge ahead, much to the surprise of many investors. Some traders had expected that the Federal Reserve would cut interest rates sooner rather than later. Nevertheless, they seem satisfied that the economy is holding up nicely and corporations are delivering solid results. In addition, it should be noted that the market rally is starting to become broader, which is a constructive development. We are now starting to see investors rotating capital into a wider variety of equity sectors (healthcare, industrials, financials), rather than concentrating on just a few leading technology issues. – 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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