Stocks got the week off to a positive start, as tech stocks bounced back from last week’s sell-off. However, the futures are suggesting a slight downtick at today’s opening bell. In overnight trading, the markets in Asia had a mixed session. Meanwhile, stocks in Europe are mostly showing small gains. Oil prices have moved lower, with West Texas Intermediate down about 0.6%, to around $77.90 a barrel.
While the large tech names have grabbed most of the headlines (and price gains) this year, small-cap stocks have been getting some attention of late. Indeed, the Russell 2000 advanced 1.7% on Monday, lifting its year-to-date gains to 9.6%. Some of the renewed interest reflects the more-attractive value proposition of smaller companies, particularly as mega-cap stocks have become increasingly pricey of late. Additionally, as prospects for a rate cut from the Federal Reserve have improved in recent weeks, interest in small caps has perked up. Fed Funds futures currently suggest a greater than 90% chance of a quarter-point reduction in the central bank’s target rate in September.
In the meantime, earnings season is picking up steam. After today’s close we’ll be hearing from Alphabet (the parent company of Google, (GOOG), Tesla (TSLA), and Visa (V). Other key reports due this week include Qualcomm (QCOM) tomorrow, Abbvie (ABBV) and AstraZeneca (AZN) on Thursday, and Bristol-Myers Squibb (BMY) on Friday.
Turning to the economic calendar, the National Association of Realtors will release its tally for existing home sales for June later today. The consensus is calling for a dip to 3.99 million, versus 4.11 million the month before. Tomorrow we get building permits from the Census Bureau. This forward-looking indicator is anticipated to edge up to around 1.446 million, compared to the 1.399 million reported in May. We’ll also get new home sales for last month. Analysts are expecting an uptick there as well, to 643,000, from 619,000 in May. On Thursday, the Census Bureau will announce durable goods orders for June. Analyst forecasts are pointing to a month-over-month gain of 0.4%, up from 0.1% in May. Friday brings the latest inflation figures with the U.S. Department of Commerce’s Personal Consumption Expenditures (PCE) index. Expectations there are pointing to a 12-month increase of about 2.5%, moderating slightly from May’s 2.6% advance.
Summing up Monday’s moves for the major U.S. indexes, the Dow Jones Industrials moved ahead 127 points, or 0.3%, the S&P 500 gained 59 points (1.1%), and the tech-heavy NASDAQ lead the pack, rising 280 points (1.6%). – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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