Before The Bell
The U.S. stock market delivered a somewhat mixed performance yesterday. However, by the end of the session, the broader average managed to land in positive territory. Some of the weakness earlier in the day was caused by concerns about a possible global economic slowdown. Furthermore, recent unrest in Afghanistan may have contributed to the more cautious tone. Overnight, the international markets have been uneven. In Asia, the Nikkei logged a weak performance. In Europe, the FTSE 100 has been staging a moderate advance. On our shores, the S&P futures are currently down around 18 points, indicating a soft start to the day.
In economic news, today will be relatively busy, as a number of reports are due out. Specifically, we will get a look at the latest monthly retail sales figures. This issuance should command a good bit of attention, given the important role that the retail consumer plays in the broader economy. A report on industrial production will also be released. On Wednesday, we will get a look at the housing starts and building permits figures for the month of July. Of note, the housing market has been holding up nicely, supported by the persistently low interest-rate environment. Also, the single family home market has gotten a boost from homeowners moving away from major metropolitan areas in the wake of the coronavirus pandemic. Some traders may have concerns that this vital part of the economy could slow if monetary policy, and the mortgage markets, were to become more restrictive. Also on Wednesday, the FOMC will release the minutes from its latest meeting. This item will certainly not go unnoticed by traders speculating about the Federal Reserve’s thought process.
In the corporate arena, many of the leading retailers are gearing up to release their results. This morning we heard from retail giant Walmart (WMT) and building supply company The Home Depot (HD). Later in the week we will receive word from TJX Companies (TJX) and Target (TGT). These reports can easily influence trading, given the size of these widely-held companies.
Technically, the stock market continues to advance, as we move further into the month of August. The broader S&P 500 Index is currently sitting near the 4,480 mark. Pushing stocks past the psychologically important 5,000 level will likely be the next big goal for the bulls. However, this tasks may require a number of attempts. Especially given current equity valuations.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
