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Before the Bell: The U.S. stock market put in a constructive session yesterday, as investors seemed comfortable with the current economic outlook and the Federal Reserve’s monetary policy. However, after the closing bell, the mood darkened when e-commerce giant Amazon.com (AMZN) released a mixed report. Overnight, the international markets traded notably lower, possibly in response to the news. In Asia, the Nikkei was off sharply. In Europe, the FTSE 100 lost some ground, as well. On our shores, the S&P futures are currently off about 30 points, suggesting a weak start to today’s session.

In economic news, a number of reports are due out today. Specifically, we will get a look at the latest monthly personal income and spending levels. These figures are of importance, as they measure the general health of the consumer. On a related note, the University of Michigan’s Consumer Sentiment Index will be finalized for the month of July, as well. Finally, the latest monthly Chicago PMI report will be published. This item, while specific to the broader Chicago region, can be quite informative, as it is regarded as a leading indicator.

In the corporate arena, the second-quarter earnings season has been progressing well. The vast majority of companies have been posting impressive numbers, and that has likely helped push stocks higher. However, it may be harder to duplicate this performance in the months ahead. For one, comparisons will be more challenging, as many businesses started to recover from the pandemic later last year. Further, profits are now starting to be impacted by inflationary pressures and supply disruptions in some areas. As noted above, after the market closed yesterday, Amazon.com delivered mixed results and provided a disappointing outlook. Given its role as a leader in the online marketplace, the news could have broad implications for the larger retail sector. The widely-watched stock is moving lower in the pre-market trading. Earlier today, Chevron (CVX) and ExxonMobil (XOM) delivered constructive reports. Investors will likely be paying close attention, as the price of oil has staged a solid advance from the lows reached in 2020. In addition, strength in the energy and basic materials sectors often reflect the outlook for the global economy.

Technically, the stock market is currently trading near record high territory. However, equity valuations are probably stretched, and negative news most likely will not go unnoticed. – Adam Rosner

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