The U.S. stock market is positioned for a positive start to today’s session. Specifically, the S&P futures are currently ahead by about 40 points, which suggests upward pressure at the opening bell. Traders may be feeling a bit better about the economy and the stock market, for now. However the general environment remains quite complicated and volatility should be expected.
In economic news, investors are likely still digesting the latest monthly employment report released last Friday. During the month of May, 390,000 jobs were added to the economy, which was a higher number than analysts had anticipated. Hourly earnings remained elevated, but there were some signs that wage pressure may be easing. There is little doubt that inflation remains a top concern for investors and the government. Later this week, we will get a look at the Consumer Price Index (CPI) for the month of May. Currently, the consensus view calls for a roughly 8.0% increase in prices for the month on a year-over-year basis. In an effort to tame inflation, the Federal Reserve has already lifted interest rates this year, and has signaled that it plans for additional hikes at the next two meetings. While the central bank is making bold moves, it should be noted that current inflationary pressures stem from many sources, including pandemic-related supply-chain issues and dislocations in the global energy markets.
In corporate news, this week will be relatively quiet with few major profit reports scheduled. On Tuesday, we will hear from J. M. Smucker (SJM), a leading food manufacturer, along with Casey’s General Store (CASY), a leading retailer. Later on Thursday, we will hear from DocuSign (DOCU), a technology company that became popular with investors during the pandemic. Looking ahead, the second quarter will soon be drawing to a close. Investors will clearly be looking over the numerous corporate reports that will be released, and focusing on the guidance being provided.
From a technical perspective, the stock market has been acting a bit better lately. A recent rally has some investors thinking that the equity markets may be stabilizing. Clearly, many stocks have come down in price over the past several months, and bargain hunters may be willing to make purchases. Nonetheless, it remains to be seen if the market can stage a sustained advance in the current climate.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
