The U.S. stock market is positioned to move lower this morning, as traders return from a three-day holiday weekend. The S&P futures are currently down roughly 40 points, which suggests some negative pressure at the opening bell. It should be noted that the market has been quite choppy lately, as traders struggle to make sense of a complicated environment.
In economic news, investors have a number of important items to review this week. Today, factory orders for the month of May will be released. Tomorrow, the Institute for Supply Management (ISM) services Index will be published. In addition, the Federal Open Market Committee (FOMC) is slated to deliver the minutes from its latest meeting. Meanwhile, at the end of the week, the government will issue the June employment report. This item carries some importance, and should be closely followed by Wall Street. Of note, the Federal Reserve carefully reviews the nation’s employment situation, as it crafts its monetary policy. Although the central bank is dedicated to taming inflation, it clearly does not want to create larger problems and derail the economy in the process.
In the corporate arena, just a few profit reports are due out this week. On Thursday, we hear from Helen of Troy (HELE), a leading consumer products company. In addition, WD-40 Company (WDFC), a manufacturer of maintenance products, weighs in with its results. Looking ahead, the second quarter has just concluded, and in the coming weeks numerous corporations will post their numbers and conduct conference calls. It should be noted that much has changed over the past several months. Inflationary pressures, previously thought to be transitory, have persisted, accompanied by a surge in fuel prices. In addition, fears of a recession have started to surface, and corporate management teams and consumers now seem less confident. It should be noted that investors will be closely looking at the financial guidance that corporations provide for the remainder of 2022. Some analysts have mentioned that the current estimates may be overly optimistic, and might be revised lower in the coming weeks.
From a technical perspective, the markets remain volatile. Although there have been sporadic rallies, these moves have not proven sustainable. Traders still seem skittish and simply may not yet trust the market environment.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
