The U.S. stock market may attempt a rebound today, after logging a challenging session yesterday. Notably, at the time that we were writing this report, the S&P 500 Index futures were ahead slightly in pre-market trading. For the remainder of the week, investors will be following the latest corporate profit reports, while also paying close attention to some important inflation data.
In economic news, there are few reports scheduled for today. The EIA (Energy Information Administration) will publish the latest weekly crude oil inventory figures, and this item may be of interest to traders that follow the commodity markets. Tomorrow, the CPI (Consumer Price Index) for the month of July will be released. Most analysts think the numbers will show that prices rose around 3.3% during the month (on a year over year basis). The PPI (Producer Price Index) will follow on Friday. Investors will be closely reviewing these reports, given that controlling inflation has proven difficult and remains a key challenge for the Federal Reserve. Also on Friday, the University of Michigan will publish the preliminary results of its August consumer sentiment survey. The consumer has continued to spend on goods and services, which has helped support the economy. However, credit card balances have now reached the $1 trillion mark, and this level of debt, combined with elevated interest rates, could lead to problems if the economy slows.
On the corporate front, we are moving through the second-quarter earnings season. Many of the large companies have already delivered their reports. So far, the results have been somewhat better than expected, given a challenging environment. After the market closes today, we will hear from The Walt Disney Company (DIS). Here, investors will want to see if the media giant can improve business at its theme parks and streaming services.
From a technical vantage point, the market recently encountered some resistance. In late July, the S&P 500 Index moved up to the 4,600 level, and then started to pull back. Although it is hard to speculate with accuracy, followers of technical systems may look for the broader Index to find support at its 50-day moving average (located near the 4,425 mark). It should be mentioned that the market has made considerable progress over the past several months, and a period of consolidation at this juncture could actually be a healthy development. – Adam Rosner
At the time of this article’s writing, the author had a position in The Walt Disney Company.
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