The U.S. stock market may get off to a soft start this morning, as investors return from a three-day holiday weekend. Overnight, the international markets have been putting in a mixed performance, owing to disappointing economic news from China. On our shores, the S&P 500 Index futures have been under some pressure in early morning trading. This week should be relatively quiet. Nonetheless, investors will receive a few notable economic reports, as well as a handful of corporate profit releases.
In economic news, today we will get a look at the factory orders report for the month of July. This issuance should receive some attention from investors, as it provides a broad measure of economic conditions, and charts the progress of various industries. Tomorrow, the nation’s trade balance will be reported, along with the ISM (Institute for Supply Management) Non-Manufacturing Index for August. In addition, the Federal Reserve will publish its Beige Book report, which is a general summation of current economic conditions. Traders will be paying attention to this material, as it can provide information relevant to the central bank’s decision making process. On a related note, later this month the Federal Reserve will be holding its regularly scheduled two-day meeting, which will conclude with an interest-rate decision and some prepared remarks from Chairman Jerome Powell.
Elsewhere, a number of retail companies will post their results this week. Tomorrow, we will hear from American Eagle Outfitters (AEO) and GameStop (GME). On Thursday, apparel retailer Zumiez (ZUMZ) and RH (RH), the former Restoration Hardware, are slated to deliver reports. At the end of week, Kroger (KR), one of the nation’s leading food retailers, will weigh in with its numbers.
From a technical vantage point, the S&P 500 Index moved lower at the start of August, but managed to find support at the end of the month. Recently, the broader average crossed back above its 50-day moving average, which followers of technical systems regard as a sign of strength. The next challenge for the bulls will be to push the market over the 4,600 level, and into new high ground. From a sector perspective, the technology issues remain popular with investors and continue to provide leadership. The basic materials issues and energy stocks are also displaying some strength. In contrast, the high dividend-yielding utilities continue to lag the pack. Notably, the utilities tend to be interest-rate sensitive, and are likely under pressure due to elevated bond yields. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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