Before The Bell
The U.S. stock market fell sharply during yesterday’s session, with pronounced weakness in the technology and growth-oriented names. Sentiment turned negative, as traders worried about inflationary pressures, rising bond yields, and potential action from the Federal Reserve. Overnight, the international markets have been putting in an uneven performance. In Asia, the Nikkei lost considerable ground. In Europe, the FTSE 100 has been moving nicely higher. Meanwhile, back on our shores, the S&P futures are ahead roughly 20 points, which may translate into a constructive start to today’s session.
In economic news, just a couple of reports are due out today. This morning we will get a look at the pending home sales figures for the month of August. This issuance should receive some attention, as the housing sector represents an important part of the broader economy. Also, the Energy Information Administration (EIA) will post the latest weekly crude oil inventory numbers. This report should be of some interest, as the price of oil has moved sharply higher this year and has been contributing to concerns about inflation. Meanwhile, investors will be keeping an eye on the political landscape in Washington, as the nation’s debt ceiling debate continues to be an area of concentration.
In the corporate arena, Micron Technology (MU) weighed in with its report yesterday after the market closed. The semiconductor giant delivered respectable results for the most-recent quarter, but offered a disappointing outlook, noting that parts shortages continue to disrupt the technology sector. This morning, Jabil, Inc. (JBL), which provides manufacturing solutions to the electronics industry, delivered a mixed set of numbers. Meanwhile, the third quarter is now coming to a close, and we will be hearing from numerous companies in the weeks ahead. The major banks and large financial institutions, which tend to be economically sensitive, will be the first to report.
Technically, the stock market has been quite volatile during the month of September. Yesterday’s selling drove the S&P 500 Index back below it 50-day moving average, located at around the 4,445 level. It remains to be seen if the bulls and bargain hunters will step in again this time, or if further selling is in order. Clearly, investors will be watching the Federal Reserve closely. The corporate profit outlook for the remainder of the year will also be of importance.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
