The U.S. stock market seems positioned to move higher at the opening bell this morning, as a new week on Wall Street begins. Specifically, the S&P equity futures are currently ahead by about 35 points, which suggests a positive bias to the session. Meanwhile, traders will likely continue to focus on a number of familiar market themes (the economy, the corporate sector, inflationary pressures, interest rates, and political turmoil overseas). In addition, a major economic forum is taking place in Switzerland this week, and this could be of interest to investors.
In economic news, today will be relatively uneventful. Tomorrow, new home sales for the month of April will be released. This report should command some attention, as many analysts have concerns that the housing market could slow if the economy softens and mortgage rates move higher. On Wednesday, The Federal Open Market Committee (FOMC) will publish the minutes from its latest meeting. This item will not go unnoticed, given Wall Street’s worries about the central banks’ shifting monetary policy. Of note, many fear that ongoing interest-rate hikes, while designed to curb inflation, could actually push the economy into a recession.
In corporate news, a handful of widely watched companies will post their results over the next few days. Today, we will hear from Zoom Video Communications (ZM). This stock gained popularity during the pandemic, and investors will likely want to see that the company can enhance its product line and expand, even as competitors enter the video conferencing marketplace. Advance Auto Parts (AAP) will also release its report, and this item should be followed closely. On Tuesday, Best Buy (BBY), a leading retailer of electronics and accessories, will weigh in with its numbers. Given recent weakness in the retail arena, traders will be looking at this report to see how the company has been dealing with the supply-chain issues that have impacted computer and electronics manufacturers.
From a technical perspective, the stock market has been quite volatile lately. Recent rally attempts have been short lived, and have not produced sustainable advances. Many traders are looking to various indicators for signs that the market may be nearing a bottom, although opinions vary greatly on this front. Meanwhile, it should be noted that many stocks that had racked up sizable gains last year have since declined considerably. This is particularly true for the technology issues, most of which trade on the NASDAQ. Perhaps, at current levels these battered stocks may start to look attractive to bargain hunters.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
