Before The Bell
The U.S. stock market turned in a mixed session yesterday, with the broader averages finishing lower and the NASDAQ closing in positive territory. Investors seemed concerned that the Delta variant of the coronavirus could put a damper on the global economy, if left unchecked. However, vaccines are now readily available, and it has been noted that the situation should be manageable without extreme restrictions. Overnight, the international markets have been trading in an uneven fashion. In Asia, the Nikkei managed to move higher. In Europe, the FTSE 100 has been somewhat weak. On our shores, the equity futures are mixed, suggesting a neutral opening to the session.
In economic news, today should be relatively quiet. The preliminary second-quarter productivity report will be the main item released today. For the remainder of the week, traders will probably be concentrating on the inflation outlook. Tomorrow, the Consumer Price Index (CPI) for the month of July will be issued, and the Producer Price Index (PPI) will follow on Wednesday. These two reports are widely used measures of inflation, and traders will likely be scrutinizing the results to speculate about the Federal Reserve’s monetary policy. So far, the central bank has taken rising prices in stride and has maintained a dovish stance. However, as the economy expands, some action is to be expected.
In the corporate arena, the second-quarter earnings season is starting to wind down. However, yesterday afternoon, we heard from AMC Entertainment (AMC), a name that has been in the news quite a bit lately. The movie theater operator posted a better-than-anticipated report, sending the stock higher in after-hours trading. This morning, Sysco (SYY), a leading distributor of food and related products, turned in encouraging numbers. Later in the week, The Walt Disney Company (DIS) will weigh in with its report, and that item should receive a good bit of attention.
Technically, the stock market continues drift higher. Of note, traders continue to scoop up equities following market pullbacks, and that is a bullish indicator, in our view. In addition, we have seen investor capital rotate between the various market sectors. This, too, has helped support the market, particularly when valuations have become elevated in some names. Lately, the healthcare and utility issues have enjoyed some popularity, while the energy and basic materials stocks have lagged the broader market.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
