Before the Bell - The U.S. stock market displayed notable strength yesterday, commencing the week on an upbeat note. Overnight, the international markets put in a mixed performance. In Asia, the Nikkei moved higher. In Europe, the FTSE 100 retreated. At home, the S&P 500 futures are indicating a slightly lower opening.  

Meanwhile, Wall Street continues to keep a careful eye on the coronavirus pandemic and its impact on the corporate sector. Traders are watching, as numerous states across the nation are starting to reopen for business. In addition, many are hoping that a vaccine for the virus will emerge ahead of schedule. Yesterday, shares of biotechnology company, Moderna (MRNA), logged sizable gains, fueled by positive research findings. Furthermore, investors are looking to the central bank to continue its stimulus measures. Federal Reserve Chairman Jerome Powell is slated to present remarks to Congress today.

Elsewhere, the recent economic reports have been somewhat dire. The April employment report put the nation’s unemployment rate at close to 15%, which was jarring. We will get a clearer image of the employment situation on Thursday, when the latest weekly initial jobless claims are released. 

In the corporate arena, the first-quarter earnings season is now largely over. However, a number of retailers, many of which follow a non-calendar fiscal year, are set to weigh in with their results in the days ahead. This morning, Home Depot (HD) put out its numbers. Shares of the home improvement giant are lower in the pre-market trading. However, Walmart (WMT) delivered a good report, and that stock is indicating a higher opening. Given the challenges facing the retail sector, investors will likely be looking closely for evidence of any progress.

Technically, the market logged sizable gains in April, but has been stuck in a choppy range for much of May. Traders may be taking time to digest recent gains, while awaiting direction. The broader S&5 500 Index is currently not far below its 200-day moving average (just under the 3,000 level). Pushing the index beyond this technical level would be a key accomplishment for the bulls.

From a sector perspective, the financial issues managed to rally yesterday. These stocks, which tend to be economically sensitive, have lagged over the past several months. Renewed investor interest in this group is a positive development. In addition, the energy issues were big gainers yesterday. Of note, these names were also severely battered a few weeks ago, as excessive production led to elevated inventories. – Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.