Before The Bell - The stock market had a modestly weaker trading session yesterday, as the Dow Jones Industrial Average finished the day off by 55 points, and the NASDAQ fell 50 points. However, the S&P 500 performed relatively better and was only down one point at the end of the session. Outperformance from consumer discretionary stocks marked the day, while energy issues were among the worst performers, hindered by a price decline in the related commodities. Traders largely held U.S. Treasury bond yields steady, not moving too far from Friday’s close.
The futures market started positively yesterday in the after-hours session, rising throughout the early evening. Still, this positive action petered out, and the indices were not too far above breakeven levels near midnight. They then fell throughout the night and are now well in the red, suggesting a weak start to the trading day.
Traders will be looking to a large amount of economic data that will be released today, which will guide sentiment. This includes the Consumer Price Index for March, which should give some insight into inflation, as the Fed will likely use these figures in formulating U.S. Federal Reserve policy. Higher-than-expected price increases would probably cause the Federal Reserve to raise rates somewhat early than now seems likely. Too, traders will be watching several regional Fed presidents deliver remarks in the early afternoon.
Later in the week, government agencies will release a slew of economic data, including the Beige Book on Wednesday and retail sales and the Philadelphia Fed manufacturing index on Thursday. Housing starts are on the docket for Friday, which should show how well construction is faring in the United States. Moreover, earnings reports will pick up with many of the larger banks releasing quarterly results. Overall, we think traders will be looking for clues into second-quarter earnings and how the economy will fare in the coming months. - John E. Seibert III