The U.S. stock market seems set to move higher this morning, as investors return from a three-day holiday weekend. As we were writing this report, the S&P 500 Index futures were advancing nicely. The NASDAQ futures were also moving notably higher. Also, the Dow Jones futures were showing measured gains. Looking ahead, investors seem optimistic that an agreement to extend the nation’s debt ceiling will be finalized over the next couple of days. Settling this issue should remove much of the uncertainty that has been weighing on sentiment.
In economic news, there are a few important items scheduled for this week. Today, the Conference Board will release the consumer confidence numbers for the month of May. Tomorrow, the Federal Reserve will publish its Beige Book report. Investors will be paying attention to this release, as it provides a detailed picture of the nation’s economy. At the end of the week, the government is slated to deliver the May employment report. Analysts expect that the numbers will show that roughly 190,000 jobs were added to the economy during the month, with the unemployment rate edging up to the 3.5% mark. Investors will also be looking to see that hourly wages are starting to moderate. It should be noted that the monthly employment report is closely followed by Wall Street, and is also of importance to the Federal Reserve. Looking ahead, the FOMC (Federal Open Market Committee) will be meeting in just a couple of weeks, and will issue an interest-rate decision at that time.
In the corporate arena, we will hear from a handful of widely-watched companies this week. In the technology sector, HP (HPQ), Salesforce (CRM), and Dell Technologies (DELL) will be posting quarterly results. In the broader consumer sector, we will hear from Lululemon Athletica (LULU), a popular manufacturer of yoga apparel.
From a technical perspective, the S&P 500 Index has been gradually drifting higher, despite some volatility along the way. Late last week, a sizable rally managed to propel the broader index back to the crucial 4,200 level. It remains to be seen if the bulls can push stocks higher from there, or if a period of consolidation might be in order. It should be mentioned that the technology sector has been pushing the market ahead lately, and many traders worry that further gains may be harder to achieve. Clearly, it would be constructive to see other equity groups making positive contributions at this point.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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