S&P 500 Retakes 50-dma As Bulls Swoop In

The S&P 500 finished the week above its 50-dma after bulls sparked a mid-week rally that carried into Friday’s close. The yield curve flattened last week as 10Y Treasury yields gave up a few basis points, while 2Y yields increased due to rising inflation expectations. Earnings will be the primary focus this week as we get into the thick of reporting season.

This morning futures are slightly lower which is not surprising after a big move last week. A test of the 50-dma that holds will be a bullish indication setting the markets up for a test of all-time highs. Upside momentum is returning to the markets and in the process, the technical damage done to stocks from early September through early October is getting repaired.

The big concern in the near term remains the fundamentals of the market with inflation and higher wages weighing on corporate profit margins and earnings. So far, earnings have been positive, but it has been primarily banks who aren’t exposed to supply chain disruptions. The next couple of weeks will give us a much better picture. What To Watch Today

 

Economy

  • 9:15 a.m. ET: Industrial production, month-over-month, September (0.2% expected, 0.4% in August)
  • 9:15 a.m. ET: Capacity utilization, September (76.5% expected, 76.4% in August)
  • 10:00 a.m. ET: NAHB Housing Market Index, October (75 expected, 76 in September)
  • 2:00 p.m. ET: Total Net TIC Flows, August ($126.0 billion in July)
  • 2:00 p.m. ET: Net long-term TIC flows, August ($2.0 billion in July)

Earnings

Pre-market

  • 7:30 a.m. ET: Albertsons Cos. (ACI) is expected to report adjusted earnings of 46 cents per share on revenue of $15.88 billion
  • 7:30 a.m. ET: State Street Corp. (STT) is expected to report adjusted earnings of $1.92 per share on revenue of $2.96 billion 

Post-market

  • 4:30 p.m. ET: Steel Dynamics. (STLD) is expected to report adjusted earnings of $4.69 per share on revenue of $5.04 billion
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