The U.S. stock market seems positioned to press ahead this morning, as investors look to extend last week’s gains. In the coming days, traders will be paying attention to the Federal Reserve, the nation’s employment situation, and the corporate profit outlook. As we were publishing this report, the S&P 500 Index futures were up 12 points (0.25%) in early morning trading.
On the economic front, numerous reports will be released this week. However, investors will most likely be focusing on two main items. On Wednesday, the FOMC (Federal Open Market Committee) will wrap up its regularly scheduled two-day meeting with an interest-rate decision. Few investors think that rates will be reduced at this time. In addition, Chairman Jerome Powell will be presenting a speech and conducting a Q&A session with the financial press. Traders should be paying close attention to these remarks, especially as the interest-rate outlook has shifted dramatically over the past few months. Looking further ahead, on Friday the government is scheduled to publish the latest monthly employment report. Most analysts think the numbers will show that roughly 250,000 jobs were added to the economy during the month of April, down from the 303,000 showing logged in March. The headline unemployment rate is expected to remain unchanged at the 3.8% level. It should be noted that the labor market has been quite strong lately and the economy has also proven resilient. To some extent, this has helped offset investor concerns about persistent inflationary pressures and the Federal Reserve’s reluctance to lower interest rates.
Meanwhile, the first-quarter earnings season continues to take shape. Over the next few days we will receive reports from numerous leading companies, including many widely-held technology issues. On Tuesday, we hear from Amazon.com (AMZN) and Advanced Micro Devices (AMD). On Thursday, Apple (AAPL) will weigh in with its numbers. Clearly, these reports could have an impact on investor sentiment and also influence the direction of the market.
Technically, stocks weakened at the start of April, but recently may have found some support. Specifically, a few days ago the S&P 500 declined to the 4,950 mark, but managed to reverse course and move higher from that level. It remains to be seen if additional gains can be achieved at this juncture, or if further consolidation will be needed. Much will depend on the quality of the corporate earnings reports that traders receive over the next several days. – 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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