The U.S. stock market may get off to a constructive start this morning, as traders look to build upon recent gains. Notably, late last week stocks advanced after a softer-than-expected jobs report had investors speculating that the Federal Reserve might be inclined to cut interest rates. A positive earnings release from Apple (AAPL) also helped lift sentiment. As we were finalizing this article, the S&P 500 Index futures were ahead about 20 points (0.38%) in pre-market trading. Futures for the Dow Jones Industrial Average and the NASDAQ were also pointing higher.
In economic news, no important reports will be released today or tomorrow. However, on Friday the University of Michigan’s Consumer Sentiment Index will be published. Investors will likely pay attention to this report, given that consumer spending is vital to the broader economy, accounting for nearly 70% of total GDP (Gross Domestic Product). Elsewhere, numerous Federal Reserve officials will be presenting speeches at various events throughout the week, and the content and tone of these remarks can have an impact on the market. It is worth mentioning that Chairman Jerome Powell will not be making any presentations, after providing extensive commentary at last week’s FOMC (Federal Open Market Committee) meeting.
Meanwhile, the first-quarter earnings season is entering its final stages, as most of the major companies in the S&P 500 Index have already posted their results. For the most part, profits have exceeded expectations and guidance has been supportive. This week we will hear from a diverse collection of corporations, including The Walt Disney Company (DIS), oil major BP p.l.c. (BP), Airbnb (ABNB), and Warner Bros. Discovery (WBD).
Technically, the stock market pulled back at the start of April, but has since managed to stabilize. The S&P 500 Index is now sitting near its 50-day moving average, which is an area of importance to traders that adhere to technical systems. It is not clear what might serve as the catalyst needed to push stocks higher in the days or weeks ahead. Investor sentiment still seems heavily influenced by the near-term interest rate outlook, so the Fed will clearly be an area of focus. Further, the presidential election is slated to take place in about six months, and a shifting political outlook could have an impact on the stock market. Finally, the military conflicts in Ukraine and across the Middle East could also play into market movements. – Adam Rosner
At the time of this article’s writing, the author had a position in The Walt Disney Co. (DIS).
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