The U.S. stock market seems set to move higher at the opening bell today, as a new week on Wall Street begins. In the coming days, investors will be concentrating on the nation’s battle with inflation, while also keeping an eye on the retail sector. A few notable corporate profit reports will also be released, which could have an impact on the market this week. As we were writing this update, the S&P 500 Index futures were up about 10 points (0.20%) in early morning trading.
In the economic arena, no major reports are due out this morning. However, tomorrow the latest monthly Producer Price Index (PPI) will be released, followed by the Consumer Price Index (CPI) on Wednesday. Of these items, investors will be focusing more closely on the consumer numbers. Analysts currently think consumer prices rose about 3.4% during the month of April, year over year, down slightly from the March reading. Clearly, investors will be looking for confirmation that inflationary pressures are moderating, as this would make it easier for the Federal Reserve to lower interest rates. Elsewhere, the U.S. retail sales report will also be released on Wednesday. Here, analysts are projecting a 0.5% increase for the month of April, slightly slower than the 0.7% advance logged in the prior month. The retail sales figures should be of some importance to investors, and could have an impact on the market. Of note, the consumer, unfazed by higher borrowing costs and rising credit card debt, has continued to spend on both goods and services, providing support for the broader economy.
The first-quarter earnings season is largely over at this point. However, we are set to receive reports from a few leading retail corporations this week. These issuances, along with the latest economic data, should help investors measure the strength of the consumer. In the retail space, we will hear from Walmart (WMT) and Home Depot (HD). In the technology arena, Cisco Systems (CSCO) and Applied Materials (AMAT) will be key reports to watch.
From a technical vantage point, the market seems to be at an important juncture. Over the past couple of weeks, the S&P 500 Index has rebounded and is now sitting just below the high-water mark reached in April (located around the 5,250 level). However, it remains to be seen if equities can advance further from here without encountering some resistance along the way. – 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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