Key Events Later This Week May Keep Traders on Sidelines

April 29, 2019
wall street

By Investors Hub

The major U.S. index futures are currently pointing to a roughly flat opening on Monday as traders look ahead to several key events later this week.

Traders may be reluctant to make any significant moves ahead of the announcement of the Federal Reserve?s latest monetary policy decision on Wednesday.

The Fed is widely expected to leave interest rates unchanged, although the accompanying statement and Fed Chairman Jerome Powell?s subsequent press conference are still likely to attract attention.

Traders are also likely to keep a close eye on the Labor Department?s monthly jobs report scheduled to be released on Friday.

Economists expect the report to show an increase of about 180,000 jobs in April compared to the addition of 196,000 jobs in March. The unemployment rate is expected to hold at 3.8 percent.

Reports on consumer confidence, pending home sales, and manufacturing and service sector activity may also impact trading in the coming days.

Traders will also have another slew of earnings news to digest, with Google parent Alphabet (GOOGL), General Electric (GE), General Motors (GM), McDonald?s (MCD), Pfizer (PFE), Apple (AAPL), Kraft Heinz (KHC), and DowDuPont (DWDP) among the companies due to report their results this week.

After recovering from an early move to the downside, stocks moved moderately higher over the course of the trading session on Friday. With the upward move, the Nasdaq and the S&P 500 ended the session at new record closing highs.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 81.25 points or 0.3 percent to 26,543.33, the Nasdaq climbed 27.72 points or 0.3 percent to 8,146.40 and the S&P 500 advanced 13.71 points or 0.5 percent to 2,939.88.

For the week, the Dow edged down by 0.1 percent, while the Nasdaq soared by 1.9 percent and the S&P 500 surged up by 1.2 percent.

The turnaround on Wall Street came as traders reacted to the Commerce Department’s preliminary reading on first quarter GDP.

The report showed an unexpected acceleration in GDP growth in the first quarter, although economists expressed some concerns about the underlying data.

The Commerce Department said real gross domestic product jumped by 3.2 percent in the first quarter after climbing by 2.2 percent in the fourth quarter of 2018.

The acceleration in the pace of growth came as a surprise to economists, who had expected GDP to increase by 2.1 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the much stronger than expected GDP growth would seem to “make a mockery of claims that the U.S. economy is slowing as the fiscal stimulus fades.”

“After all, 3.2% is well above the economy’s 2% potential pace and the 2.2% gain in the final quarter of last year,” Ashworth said. “Looking beyond the headline number, however, there are plenty of causes for concern.”

Ashworth predicted positive contributions from net trade, inventories and highways investment will all be reversed in the coming quarters and continues to expect overall growth to slow this year.

Traders were also reacting to the latest batch of mixed earnings news from big-name companies, with auto giant Ford (F) moving sharply higher after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.

Online retail giant Amazon (AMZN) also ended the day firmly in positive territory after reporting better than expected quarterly results.

On the other hand, shares of Intel (INTC) plunged by 9 percent after the semiconductor giant reported better than expected first quarter results but provided disappointing guidance.

Bargain hunting contributed to considerable strength among tobacco stocks, with the NYSE Arca Tobacco Index jumping by 2.6 percent after slumping to a two-month closing low on Thursday.

Gold stocks also showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.5 percent. The rally by the gold sector came amid a notable increase by the price of the precious metal.

Housing stocks also ended the day notably higher, while energy stocks moved to the downside amid a steep drop by the price of crude oil.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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