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. Although the international markets managed to make some progress overnight, the S&P 500 and NASDAQ futures have been under some pressure in pre-market trading this morning. In addition to looking at today’s economic and corporate news, traders will also be paying close attention to the commodity markets. Specifically, Saudi Arabia and other major producers just announced plans to reduce oil output. This development could add to investor concerns, as a surge in oil prices may aggravate inflationary pressures.
In economic news, a couple of notable items will be released this morning. Specifically, we will get a look at the ISM (Institute for Supply Management) Manufacturing Index for the month of March. In addition, the construction spending figures for the month of February will be released. However, the main event will take place at the end of the week when the government publishes the March employment report. Analysts are currently anticipating that around 235,000 jobs were added to the economy last month, down from the figure posted in February. The headline unemployment rate is expected to remain unchanged at the 3.6% mark. Meanwhile, average hourly wages (year over year) are projected to show an increase of 4.3%, which would suggest that inflationary pressures may be moderating. The Federal Reserve has stated that higher wages have fueled the nation’s inflation problems, so this figure will be closely watched by investors.
In corporate news, no major profit reports are due out today. However, later this week, we will hear from Conagra Brands (CAG) and Constellation Brands (STZ). Looking ahead, the first quarter has just closed, and earnings season will soon commence. The large financial companies tend to deliver their results first, and investors will likely be paying special attention to these reports given recent weakness in the banking industry.
From a technical perspective, the stock market has displayed some strength over the past several sessions, closing the month of March on a constructive note. Specifically, the S&P 500 Index has managed to climb back above the widely watched 4,000 level. Clearing this barrier may help improve investor sentiment. The next key challenge for the bulls will be to push the broader average past the 4,200 area to move beyond the high point hit earlier this year. – 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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