The U.S. stock market seems set to move higher this morning, as traders look to extend the gains logged at the end of last week. The broader stock market futures are currently up over 35 points, which is a positive indicator, in our view. Meanwhile, another busy week on Wall Street is set to unfold.
In economic news, the housing market will take the spotlight over the next few days. Tomorrow, we will get a look at housing starts and building permits for the month of June. On Wednesday, the latest monthly existing home sales figures will be published. These reports will be closely followed by investors, given that the housing market makes up a meaningful part of the broader economy. Of note, the real estate industry is closely tied to the financial sector, as mortgage lending is needed for large transactions. Here, the rising interest-rate climate has been creating challenges for new buyers, and could put a damper on sentiment. In addition, elevated expenses associated with real estate (heating fuel, building materials, labor, etc.), could also have an impact on the marketplace and put pressure on new construction and renovation projects.
In the corporate arena, the second-quarter earnings season has officially started. Last week we heard from a few large financial names. This morning, we got a look at results from Bank of America (BAC) and Goldman Sachs (GS). Tomorrow, Lockheed Martin (LMT) and Johnson & Johnson (JNJ) will weigh in with their reports. Clearly, investors will want to see how corporations have been faring in a more challenging economic environment. Ongoing inflationary pressures, supply-chain issues, inventory problems, and rising interest rates will all likely be topics for discussion on upcoming corporate conference calls.
From a technical perspective, the market may be starting to stabilize, at least temporarily. For the past couple of weeks, the S&P 500 Index has been trading in a choppy sideways range, just above the 3,700 mark. However, given the volatility lately, it remains to be seen if stocks will be able to hold at the current levels. It should be noted that traders received some dismal economic reports last week, but they managed to shrug off the news. When negative news no longer leads to market declines, it could be said that investors have already fully adjusted their expectations, possibly clearing the way for progress.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
