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We step quietly into a new trading week, without much in the way of economic or earnings metrics with which to respond this morning. Market indexes are taking the opportunity to fill in the holes left from last week’s sell-off: the Dow, which was down -2% last week, is up +200 points at this hour; the S&P 500 is up +30 points in the pre-market after falling -1.5% last week; and the Nasdaq is +100 right now, after dumping -0.9% last week.
Overall year to date, we still look to be in pretty good shape: the Nasdaq is +19% so far and the S&P is +20.5%; both the Dow and the small-cap Russell 2000 — which dropped -3% last week and is -5.6% over the past six months — are +14.5% year to date. So while we do still happen to be trading in dreaded September, historically the worst month for market indexes, all markets have shown strength in 2021.
Without anything truly calamitous on the horizon (hopefully), the main concern for market participants is clearly the specter of inflation sticking around longer than the Fed continues to forecast, based mostly on supply chain challenges and higher wages paid to workforces. Now that prices are up more than the optimum 2%, if they accelerate from here, the Fed will have no choice but to taper asset purchases and begin raising interest rates.
But the Fed has been emphatic about allowing inflation to wash over the domestic economy in order to bring more of the potential workforce back toward full employment. This has had mixed results to this point; while wages have indeed increased, trimming the disparity somewhat between our highest-paid hires and our lowest, we still see roughly nine million Americans still without work, even with 10 million job openings in existence.
We’ll see how employment is getting along this Thursday morning, with jobless claims reads continuing to target new post-Covid lows. Otherwise, inflation and economic growth will be depicted in Consumer Price Index (CPI) reports (following last week’s higher-than-expected Producer Price Index), Import & Export Prices, Empire State & Philly Fed surveys, Retail Sales and the University of Michigan’s Consumer Sentiment Index.
We even get fiscal Q1 earnings results from Oracle ((ORCL - Free Report) after today’s closing bell — 4% gains are expected on both top and bottom lines, and Oracle has not posted an earnings disappointment in five years. Not only that, but next week brings us earnings reports for FedEx ((FDX - Free Report) , Nike ((NKE - Free Report) and Costco ((COST - Free Report) . This not only marks the early start of Q3 earnings season, but also give a glimpse into sector-leading performances in deliveries, shoes & apparel and discount groceries.
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Market Futures Higher Ahead of Opening
We step quietly into a new trading week, without much in the way of economic or earnings metrics with which to respond this morning. Market indexes are taking the opportunity to fill in the holes left from last week’s sell-off: the Dow, which was down -2% last week, is up +200 points at this hour; the S&P 500 is up +30 points in the pre-market after falling -1.5% last week; and the Nasdaq is +100 right now, after dumping -0.9% last week.
Overall year to date, we still look to be in pretty good shape: the Nasdaq is +19% so far and the S&P is +20.5%; both the Dow and the small-cap Russell 2000 — which dropped -3% last week and is -5.6% over the past six months — are +14.5% year to date. So while we do still happen to be trading in dreaded September, historically the worst month for market indexes, all markets have shown strength in 2021.
Without anything truly calamitous on the horizon (hopefully), the main concern for market participants is clearly the specter of inflation sticking around longer than the Fed continues to forecast, based mostly on supply chain challenges and higher wages paid to workforces. Now that prices are up more than the optimum 2%, if they accelerate from here, the Fed will have no choice but to taper asset purchases and begin raising interest rates.
But the Fed has been emphatic about allowing inflation to wash over the domestic economy in order to bring more of the potential workforce back toward full employment. This has had mixed results to this point; while wages have indeed increased, trimming the disparity somewhat between our highest-paid hires and our lowest, we still see roughly nine million Americans still without work, even with 10 million job openings in existence.
We’ll see how employment is getting along this Thursday morning, with jobless claims reads continuing to target new post-Covid lows. Otherwise, inflation and economic growth will be depicted in Consumer Price Index (CPI) reports (following last week’s higher-than-expected Producer Price Index), Import & Export Prices, Empire State & Philly Fed surveys, Retail Sales and the University of Michigan’s Consumer Sentiment Index.
We even get fiscal Q1 earnings results from Oracle ((ORCL - Free Report) after today’s closing bell — 4% gains are expected on both top and bottom lines, and Oracle has not posted an earnings disappointment in five years. Not only that, but next week brings us earnings reports for FedEx ((FDX - Free Report) , Nike ((NKE - Free Report) and Costco ((COST - Free Report) . This not only marks the early start of Q3 earnings season, but also give a glimpse into sector-leading performances in deliveries, shoes & apparel and discount groceries.