The U.S. stock market may get off to a mixed start this morning, as traders digest the gains logged over the past few days. Late last week investors were relieved to see that an agreement to extend the nation’s debt ceiling had finally been reached. A stronger-than-anticipated May employment report also helped lift sentiment. Meanwhile, over the weekend Saudi Arabia announced that it would be cutting crude oil production. The news sent the price of oil higher, but does not seem to be weighing too heavily on the stock market. As we were writing this piece, the S&P 500 Index futures were largely unchanged.
In economic news, there will be a few reports for traders to look over today. Factory orders for the month of April will be reported. Also, the ISM (Institute for Supply Management) Non-Manufacturing Index for May will be released. Tomorrow, there are no major reports scheduled, and the remainder of the week will be relatively quiet. Looking ahead, traders seem keenly focused on the economic events set to take place next week. Specifically, on Tuesday and Wednesday June 13th and 14th, the FOMC (Federal Open Market Committee) will hold its regularly scheduled two-day meeting, which will conclude with an interest-rate decision and a press conference. The central bank has raised rates aggressively over the past year, in an effort to combat inflation. However, it is quite possible that a pause at this point may make some sense.
In the corporate arena, Apple (AAPL) will be hosting a major event today. Given the importance of this leading technology company, Wall Street should be closely following the story. Meanwhile, investors will have just a small batch of corporate earnings reports to review this week. Tomorrow, we will hear from The J.M. Smucker Co. (SJM). On Wednesday, Campbell Soup Company (CPB) will weigh in with its numbers.
From a technical vantage point, the S&P 500 Index has put in a choppy performance lately, but has ultimately managed to move higher. The broader index is currently approaching the 4,300 level, which may be an area to watch, given that stocks encountered considerable resistance at this point last August. Meanwhile, the technology sector has attracted a good deal of attention, driven by investor optimism about new AI (artificial intelligence) applications. As a result, some traders may be wondering if valuations in the technology group have become stretched. At this point, it is quite possible that investors will look to move capital into other equity sectors. For instance, many financial issues have fallen out of favor over the past several months, and bargain hunters may take a second look at some of these stocks.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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