The U.S. stock market seems positioned for a softer start this morning. Specifically, the broader equity market futures are in the red, which indicates some downward pressure at the opening bell. It also seem quite reasonable that traders might take a brief pause at this point, as they digest the sizable gains logged over the past several sessions.
In economic news, a few key reports will be released this week. On Tuesday, we will get a look at building permits and housing starts for the month of July. Of note, housing demand is an area of the economy that is closely linked to the interest-rate environment, and mortgage lending, in particular. It is worth noting that the 30-year mortgage now stands above the 5% mark, and it remains to be seen how this development will impact the real estate markets. On Wednesday, the Commerce Department will publish the retail sales figures for the month of July. This item will likely be watched by investors, as the consumer is a vital part of the broader economy. In addition, the minutes from the latest Federal Open Market Committee (FOMC) meeting are scheduled to be released, and this issuance should be of interest to traders seeking to understand the central bank’s policies.
In the corporate arena, many large names in the retail sector will post results over the next few days. Tomorrow, we get a look at reports from Home Depot (HD) and Walmart (WMT). On Wednesday, Target (TGT) and TJX Companies (TJX) will weigh in with their numbers. Clearly, traders will want to see how these massive companies have been faring in the current environment. These corporations are retail industry leaders, and their results should provide some useful information.
From a technical view point, the stock market performed quite well during the first part of August, and has managed to extend the rally that started in mid-June. Of note, the S&P 500 Index has successfully moved above the 4,200 mark, which had been a point of resistance. The next major feat for the bulls will be to push the broad index above its 200-day moving average, located near the 4,330 level. It is encouraging that the current rally is showing broad-based strength, with numerous sectors making contributions. Here, the larger technology and consumer issues have been standouts.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
