The U.S. stock market may get off to a mixed start this morning, after logging a weak session yesterday. As we were publishing this update, the S&P 500 Index futures were ahead about 27 points (0.50%), while the Dow futures were under considerable pressure. Investors continue to react to President Trump’s evolving tariff agenda. It is quite hard to know how the current trade situation will ultimately play out. Some sectors, such as technology, may be severely impacted by the new trade agreements. Meanwhile, the latest economic reports, and the first-quarter earnings season, also remain major areas of focus for Wall Street.
In economic news, this morning the latest weekly initial jobless claims came in at 215,000, which was a bit lower than had been expected. In addition, March housing starts settled at an annualized rate of 1.3 million units, which fell just short of the consensus view. There are no major economic reports due out tomorrow. While the latest economic news is of interest, it should be noted that investors are really looking to the Federal Reserve for signs that interest rate cuts will resume. Unfortunately, Fed Chairman Jerome Powell remains concerned about a possible uptick in inflation and does not seem to be in a rush to relax his stance.
The first-quarter earnings season is starting to take shape. This morning, UnitedHealth Group (UNH) posted a weak report, and that stock is under considerable pressure. However, Taiwan Semiconductor Manufacturing Co. (TSM) managed to deliver impressive results, and investors seem pleased. Later today, Netflix (NFLX) will weigh in with its numbers.
The stock market remains quite volatile. For perspective, stocks staged an impressive rebound last week. However, traders were unable to extend those gains. Some investors may be worried about initiating new stock positions at this juncture. Others, especially leveraged hedge funds, may be looking to take profits during market bounces. Looking ahead, it remains to be seen if the bulls can mount a sustained buying campaign, and bring about a prolonged market advance. From a sector perspective, the dynamic technology issues remain out of favor, as investors look for stability in high-yielding utilities and defensive consumer stocks. It should be noted that sentiment still seems cautious. This is probably why investors, looking for safe havens, continue to flock to gold and other precious metals. – 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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