The major U.S. indexes began the week on a positive note. However, the futures are suggesting a mixed open for today’s session. In overnight trading, markets in Asia closed mostly higher, with Japan’s NIKKEI rising 1.6%. Meanwhile, stocks in Europe are in the plus column, led by a 1.1% gain for London’s FTSE. Elsewhere, oil prices have moved lower, with West Texas Intermediate down about 0.4%, to around $78.20 a barrel.
Investors were apparently encouraged by Friday’s jobs report, which indicated lower-than-expected growth in payrolls and an uptick in the unemployment rate. Specifically, the nation added 175,000 positions last month, versus the Wall Street consensus of around 240,000, marking the first downward surprise in several months. This, in turn, increased hopes that the Federal Reserve would be able to begin cutting its overnight lending rate—a move that is widely viewed as being favorable for stocks. Analysts are currently calling for two quarter-point decreases this year, down from expectations of around six at the start of 2024.
Meanwhile, earnings season is winding down, and the news has largely been good, with most of the S&P 500 companies topping expectations. This morning, we heard from Dow component Walt Disney (DIS). The media and entertainment giant reported March-quarter adjusted earnings of $1.21 a share, topping analyst estimates of around $1.10 and coming in well ahead of last year’s figure of $0.93. Also of note, the company’s struggling streaming services business saw its losses reduced to $18 million, compared to a deficit of $659 million in the same period last year.
The economic news docket is relatively light this week. Today, the Federal Reserve will provide the latest figures on consumer credit. Expectations are calling for an increase of $15.5 billion for March, up from the $14.12 billion increase in February. Since 2020 (the last year there was a decline), outstanding consumer debt has increased by $866.2 billion, or just under 21%. Lastly, Friday brings the Department of Labor’s report on initial jobless claims. The consensus there is looking for a slight uptick, to 211,000, compared to 208,000 the week before.
Summing up Monday’s moves, the Dow Jones Industrials increased 176 points, or 0.5%, the S&P 500 was up 52 points (1.0%), and the tech-laden NASDAQ led the pack with a gain of 192points (1.2%). - Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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