The U.S. stock market may get off to a mixed start today, as traders digest the sizable gains logged at the end of last week. Overseas, the markets have been putting in an uneven session. On our shores, the equity futures had been under pressure earlier this morning, but now seem to be firming up. This week, the Federal Reserve and the nation’s employment situation will be the main areas of focus for investors.
In economic news, today should be relatively quiet, as there are few major reports scheduled. On Tuesday and Wednesday, Federal Reserve Chairman Jerome Powell will be addressing Congress. Cleary, investors will be following these proceedings in an effort to better understand the central bank’s decision-making process. On Friday, the government will publish the February employment report, and Wall Street will be carefully dissecting this report. Most analysts expect that roughly 225,000 jobs were added to the economy over the past month, down sharply from the figure posted in January. The unemployment rate is expected to remain unchanged near the 3.4% mark. In addition, investors will be looking at wages to see if inflationary pressures are starting to ease in this critical category.
In the corporate arena, quite a few companies are set to deliver quarterly results this week. Specifically, we will hear from a number of leading retailers, including DICK’S Sporting Goods (DKS), Casey’s General Stores (CASY), and Ulta Beauty (ULTA). Retail businesses can be economically sensitive, and the current environment has posed numerous challenges. Some of these businesses have had to adjust their merchandise assortment, increase prices, and work to maintain margins. Nonetheless, the retail stocks, as a group, have managed to hold up nicely this year, relative to other market sectors.
From a technical vantage point, the rally that commenced in mid-October still seems to be intact. Although the S&P 500 Index did pullback considerably during the month of February, the market has managed to find some support. Specifically, the broad-based index has been able to stay above its 200-day moving average (located around the 3,950 area). This is a key level for traders following technical systems, and is an important measure for investors to watch.
Further, it should be noted that the dynamic technology stocks have not encountered much selling, which suggests that traders may still have some tolerance for risk assets. – 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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