Before the Bell - The U.S. stock market moved sharply higher yesterday, but may moderate a bit today. Of note, the international markets put in an uneven session overnight. In Asia, the Nikkei managed to advance, but in Europe, the FTSE 100 displayed some choppiness. On our shores, the equity futures are suggesting a mixed start to the day, particularly for the NASDAQ.  

Lately, investors have been closely following President Trump’s medical condition. The President seems to be improving, after testing positive for COVID-19 last week, and has left the hospital to return to the White House. The nation’s leader was reportedly given an experimental drug treatment produced by Regeneron (REGN) and that stock traded nicely higher yesterday, likely as a result. Investors may be optimistic that the medicine will be more widely deployed in the fight against the coronavirus going forward. 

In addition, it should be noted that the Democratic Presidential candidate Joe Biden has been gaining in the polls, and that may be of importance to investors. Some market participants could be getting comfortable with a Democratic Party victory at this point. Others may simply be hopeful that the election will be decisive and that the outcome will not be contested. 

Elsewhere, Wall Street seems more optimistic that a second stimulus bill will be approved sometime in the near future. Needless to say, the economic recovery has been somewhat uneven, as the latest, and somewhat disappointing, monthly employment report demonstrated. Certainly, another sizable financial aid package would be a plus for many Americans and businesses.
In economic news, this week should be relatively calm. Today, we get a look at the trade balance figures for the month of August. Tomorrow, the FOMC will deliver the minutes from its September meeting. On Thursday, the employment situation will return to the spotlight with the release of the latest weekly jobless claims figures. 

Elsewhere, in the corporate arena, the third quarter has just concluded, and numerous corporations will be weighing in with their results in the weeks ahead. Many companies stopped giving guidance earlier this year, noting the lack of visibility caused by the coronavirus pandemic. Nonetheless, investors will be closely sifting through company reports and conference calls to gain a better sense of direction. Next week we will hear from some of the nation’s biggest banks, and that should be informative. Of note, the market has been trading at elevated valuations lately, in our view, and there could be some volatility should results fall short of expectations.  

Technically, the stock market pulled back in early September, but seems to have regained its footing. Yesterday’s move up positions the broader index back above its 50-day moving average, located around the 3,365 mark. However, it remains to be seen if the bulls can mount a sustained buying campaign and return stocks to the highs reached about a month ago.   – Adam Rosner

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