Before the Bell - The U.S. stock market put in a divided session yesterday, as the Dow Jones Industrial Average moved higher and the technology-heavy NASDAQ slipped into negative territory. Investors may have become more cautious, given the number of important economic reports due to be released this week. Overnight, the international markets have been trading in a divided fashion. In Asia, the Nikkei managed to press ahead. In Europe, the FTSE 100 has been under pressure. Meanwhile, on our shores, the equity futures are now ahead, which suggests a constructive start to today’s session.
In economic news, this morning we got a look at the Consumer Price Index (CPI) for the month of August. This report, which is seen as a broad measure of inflation, will be closely followed by traders. Inflation cooled slightly last month, but remained strong year over year. The CPI increased 5.3% compared to last year. Last week, the Producer Price Index (PPI) came in higher than some analysts had expected, and that probably did little to help sentiment. It should be noted that lately raw and finished materials have been in short supply, transportation and distribution networks have been sluggish, and labor costs have been starting to rise. It is not yet clear to what extent these pressures have been caused by the coronavirus pandemic, or if other forces might be at work here. On Wednesday, we will get a look at the import and export prices for the month of August, which may provide additional information about the inflation situation. In addition, the latest monthly industrial production numbers will be released.
In the corporate arena, this will be a light week for profit reports. However, after the market closed yesterday, Oracle (ORCL), a leading enterprise software company, delivered a mixed release. That stock is under some pressure in pre-market trading. Today, we hear from FuelCell Energy (FCEL), an emerging name in the alternative energy industry.
Technically, the stock market has pulled back over the past week, or so. The S&P 500 Index is currently not far from its 50-day moving average, which is located at around the 4,430 mark. Over the past few months, there have been a similar patches of weakness, and this technical area has helped provide some support. It remains to be seen if the bulls can mount another buying campaign, and push the market higher from the current level. – Adam Rosner