Good morning,
As we kick off the week, the stock futures market appears relatively stable, with investors bracing for a mix of economic reports and eagerly anticipating earnings updates from two major tech players.
Futures linked to the Dow Jones Industrial Average have taken a modest climb of 46 points, equivalent to a 0.13% increase. Similarly, S&P 500 futures and Nasdaq 100 futures have made slight gains, advancing by 0.25% and 0.41%, respectively.
In the previous week, the stock market closed on a positive note after a somewhat tumultuous period. The Dow Jones saw a gain of 75.86 points or 0.22%, finishing at 34,576.59, while the S&P 500 managed to edge higher by 0.14%, breaking a three-day losing streak and concluding at 4,457.49. The Nasdaq Composite eked out a modest 0.09% gain, settling at 13,761.53.
However, it's worth noting that all three indices experienced losses for the week, marking the first negative week in three for both the S&P and Nasdaq.
Investor attention is now focused on crucial inflation data expected in the upcoming week. Stronger-than-anticipated economic data from the prior week has raised concerns that the Federal Reserve may consider a more aggressive rate hike approach than previously thought.
According to CME Group’s Fed Watch tool, traders are currently pricing in a roughly 4 in 10 chance of a rate increase in November, following an anticipated pause in September.
Yung-Yu Ma, Chief Investment Strategist at BMO Wealth Management, commented on the market's outlook, stating, "Overall, the market will be looking for direction amid recent choppiness and concern that the economy is set to slow down in the coming quarters."
As we progress through the week, Wednesday and Thursday will bring key economic reports, including the latest Consumer Price Index (CPI) and Producer Price Index (PPI) readings. Investors are hoping for subdued figures, although both indices are expected to show increases due to mounting energy costs.
Ma further emphasized the significance of oil prices, stating, "Both CPI and PPI inflation reports will highlight the importance of oil prices, which has pushed toward the upper end of its one-year trading range. A break above $90 per barrel for West Texas Intermediate (WTI) would start to cause concerns for future price pressures in the economy."
In addition to economic data, investors will be closely watching the release of retail sales data on Thursday and the University of Michigan’s Consumer Sentiment Survey, scheduled for release on Friday. These reports will provide valuable insights into consumer spending trends for the remainder of the year.
On a different note, investors can also expect financial updates from two tech giants this week: Oracle on Monday and Adobe on Thursday. Meanwhile, Apple will be hosting its highly anticipated "Wonderlust" product event on Tuesday, where the unveiling of the iPhone 15 is widely expected.
Notably, Apple faced some challenges in the previous week, dipping below its 50-day moving average following reports of China's plans to expand its ban on the use of iPhones in government agencies and state-owned companies. This development has raised concerns among investors about the largest S&P 500 stock potentially facing some headwinds.
Wishing you a successful week of trading ahead.
Best regards,
Steve Halls
NexxtGen.pro/invest
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