The U.S. stock market will probably get off to a weak start at the opening bell this morning. The markets across Europe lost ground earlier today, and the broader equity futures are in the red. Traders may be taking a more cautious tone at this point, given that stocks have advanced sharply over the past several weeks, and some consolidation may be warranted.
In the economic arena, there will be plenty of reports for traders to review over the next few days. On Tuesday, the new home sales figures for the month of July will be released. The latest monthly durable goods orders report will be published on Wednesday. This issuance should provide some insight into the supply-chain problems that have plagued numerous corporations lately. At the end of the week, the Personal Consumption Expenditures (PCE) Index for the month of July will be released. This issuance tends to be closely followed by the Federal Reserve, and will probably receive attention from investors. Recent economic reports have suggested that inflationary pressures may be starting to ease, and some traders are hoping that the central bank may be less aggressive about approving large interest-rate hikes. Federal Reserve Chairman Jerome Powell will offer some remarks on Friday, as well.
In corporate news, a number of sizable companies will post their results early this week. Today, we will get a look at reports from Palo Alto Networks (PANW) and Zoom Video Communications (ZOOM). On Tuesday, Advance Auto Parts (AAP) and Macy’s (M) will deliver their numbers. It should be noted that many companies have been able to meet analyst expectations, despite a challenging environment. Clearly, this has helped encourage the bulls, and has lent support for equities.
From a technical view point, the S&P 500 Index has staged an impressive rebound over the past several weeks. Notably, bullish traders have managed to push the broader index up to its 200-day moving average, situated near the 4,320 mark. However, it should be mentioned that the market currently seems to be running into resistance, and some stocks seem to be struggling to achieve additional gains. Periods of consolidation and small pullbacks normally accompany rallies and are to be expected.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
