The U.S. stock market seems positioned for a slightly higher start at the opening bell today. The international markets managed to make some progress overnight, and on our shores, the broader equity futures are ahead modestly. After last week’s solid employment numbers, traders will likely be focused on the nation’s economic outlook and the Federal Reserve’s next policy move. The hostilities in Ukraine, which continue to persist with no credible diplomatic solution in sight, should also be an area of attention.
On the economic front, this morning we will get a look at the latest monthly factory orders report, which measures demand across numerous industries. Tomorrow, the Institute for Supply Management’s (ISM) Non-Manufacturing Index for the month of March will be released, while on Wednesday, the Federal Reserve will be back in the spotlight when the Federal Open Market Committee (FOMC) publishes the minutes from its March meeting. Traders will be likely be studying this issuance to see how the central bank views current economic conditions, particularly the inflation outlook.
In the corporate arena, this week will be relatively quiet, featuring just a handful of notable corporate profit reports. Tomorrow, we will hear from Acuity Brands (AYI), a leading supplier of lighting and building management solutions to residential, commercial, and industrial customers. This issuance may be useful for investors following the broader construction sector. On Wednesday, Levi Strauss & Co. (LEVI) will post its latest quarterly numbers; their report should provide some insight into the state of the retail apparel industry, which has been challenged by labor shortages, supply-chain disruptions, and inflationary pressures. Finally, on Thursday, Conagra Brands (CAG), a manufacturer of packaged foods, will deliver its results. Looking ahead, the first quarter of 2022 has just closed, and the earnings season will soon commence. No doubt, Wall Street will be busy sifting through the barrage of reports, looking for some direction.
From a technical perspective, the stock market moved notably higher during the second half of March, and it is likely too early to tell how the month of April will shape up. Traders may take advantage of the recent rally to reposition their portfolios. We have noted some sector rotation taking place, with investors more willing to allocate capital to riskier technology names. Assuming it continues, this development could suggest a shift in sentiment.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
