Before The Bell
The U.S. stock market put in a constructive session yesterday, as the broader S&P 500 Index and the NASDAQ moved to new high ground. In contrast, the Dow Jones Industrial Average encountered some selling pressure, due to weakness in a couple of key names. Investors seemed optimistic about the nation’s current economic outlook, and pleased with the President’s infrastructure program. However, concerns that coronavirus variants could prolong the pandemic have started to emerge. Overnight, the international markets delivered a mixed performance. In Asia, the Nikkei traded notably lower. In Europe, the FTSE 100 managed to make some progress. On our shores, the S&P futures are not registering much of a change, suggesting a flat start to the day.
In economic news, no major items were released yesterday. Today, we get a look at the consumer confidence numbers for the month of June, along with a couple of housing market reports. Moving ahead, the employment situation returns to the spotlight this week. Tomorrow, Automatic Data Processing (ADP) will release its private sector employment figures for the month. On Thursday, the latest weekly jobless claims will be published. Finally, on Friday morning, the government is slated to deliver the June employment report. Analysts are looking for a solid increase in nonfarm jobs, compared to the 559,000 figure posted in May. Also, the unemployment rate is expected to move down from the current 5.8% level. No doubt, this issuance will be carefully followed, as the employment situation is closely watched by the Federal Reserve, as it looks to shape its policies. For perspective, Wall Street was rattled after the last FOMC meeting, when the central bank suggested that it could lift interest rates sooner than expected.
In the corporate arena, the second quarter comes to a close tomorrow. In the coming weeks, numerous companies will be weighing in with their numbers and providing guidance for the remainder of 2021. Meanwhile, this week a handful of corporations that follow non-calendar fiscal years are scheduled to report results. The list includes a few important names: Micron Technology (MU), General Mills (GIS), and Walgreens Boots Alliance (WBA).
Technically, the S&P 500 Index dropped to it 50-day moving average several days ago, but seems poised to close the month of June on a strong note. Looking it ahead, it will be crucial that the economy and corporate sector continue to expand, given current equity market valuations.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
