The U.S. stock market may well open lower this morning, as a new week on Wall Street commences. Of note, the broader equity market futures are currently off about 20 points, which indicates some downward pressure at the start of the session. Last week, stocks managed to make some progress, but it remains to be seen if traders can keep the momentum in place.
In economic news, there will be few important items released today and tomorrow. However, on Wednesday, the Consumer Price Index (CPI) for the month of June will be reported. Here, investors will be looking for signs that inflationary pressures might be easing. On Thursday, the Producer Price Index (PPI) will be published, which should also be quite informative. On Friday, the latest monthly retail sales numbers will be published, and this issuance should receive some attention. Looking ahead, inflation likely remains the largest concern for investors, as higher prices have created challenges for companies and consumers. In response, the Federal Reserve has started to take action, which has put pressure on the financial markets. It will be important for the central bank to adjust its policy and tame inflation without creating a major recession and a prolonged market downturn.
In corporate news, the second-quarter earnings season is set to begin this week. A number of big banks and financial institutions will be among the first to weigh in with their results. On Thursday, we will hear from JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS). On Friday, Citigroup (C) and U.S. Bancorp. (USB) will deliver their numbers. Investors will be closely dissecting the many reports coming out over the next few weeks. Hopefully, most companies will show continued progress, despite a more challenging environment. The commentary and guidance being provided for the remainder of 2022 will be of considerable importance.
From a technical perspective, the stock market has been acting better after hitting a low point near the 3,650 level in June. Moreover, many of the leading technology stocks have started to firm up, which is a constructive development. However, it should be noted that small rallies can take place during bear markets, and these advances may not lead to much progress. Pushing the broader S&P 500 Index back above its 50-day moving average (located around 4,000) will likely the next challenge for the bulls.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
