The U.S. stock market seems set to move higher this morning, as Wall Street reacts to the latest political news. Over the weekend, former President Donald Trump survived an assassination attempt, just days before the start of the Republican National Convention. Some traders may think this event increases the odds of a Trump victory, and that such an outcome could be a plus for the economy and the market. In the days ahead, investors will be following the latest economic news, while sifting through a sizable batch of corporate profit reports. As we were writing this piece, the S&P 500 Index futures were ahead roughly 25 points (0.42%) in early morning trading.
In economic news, no major reports will be released today. However, Federal Reserve Chairman Jerome Powell will be making a presentation later this morning, and several other central bank officials will offer remarks over the next few days. Tomorrow, the latest monthly U.S. Retail Sales report will be published. Analysts expect the figures to show that sales softened slightly during the month of June, due largely to lower spending in the automotive category. When adjusted for this volatile area, comparisons should look somewhat better. This issuance should be of importance, as some investors worry that the consumer may be feeling fatigued.
In the corporate sector, the second-quarter earnings season is now in progress. The major banks and financial companies remain an area of focus. This morning we received positive reports from Goldman Sachs (GS) and BlackRock (BLK). Tomorrow, Bank of America (BAC) and Morgan Stanley (MS) will deliver their results. Later in the week, a couple of leading technology companies will take the spotlight. Specifically, on Wednesday we will hear from ASML Holding (ASML), and on Thursday we will receive results from Taiwan Semiconductor Manufacturing Company (TSM). These companies are both heavily involved in artificial intelligence, so investors will want to see progress here. In addition, traders should be paying attention when Netflix (NFLX) posts its numbers, especially given ongoing competition in the streaming video marketplace.
Technically, the stock market continues to advance as we move into the second half of the year. Traders have expressed concerns that the market rally has been confined to a few large technology stocks. However, over the past few days we are seeing signs of broader sector participation, thanks to softer inflation data and a more-supportive interest-rate outlook. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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