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Before the Bell - The U.S. stock market attempted to advance yesterday, but slipped into negative territory by the end of the session. Lately, Wall Street seems a bit more concerned that the ongoing coronavirus pandemic could dampen the economic recovery and weigh on corporate profits. It remains to be seen if traders can produce a meaningful rally today. Overnight, the international markets have been heading higher. In Asia, the Nikkei staged a solid advance. In Europe, the FTSE 100 has also been gaining ground. Meanwhile, on our shores, the equity futures are currently up nicely, suggesting a positive start to the day.

In economic news, this morning we get a look at the Producer Price Index (PPI) for the month of August. This issuance will be important to traders monitoring the inflation outlook. Of note, Consumer Price Index (CPI) will follow next week, and that report should also provide some useful information. Clearly, inflation has been a concern lately, and numerous corporations have reported rising costs for materials, supplies, and transportation. Upward pressure on wages and difficulty finding qualified employees has also been an area of difficulty. It is not clear if these inflationary challenges will prove to be transitory, or if they will continue into the distant future. The Federal Reserve will be monitoring the situation, as it looks to craft its monetary policy. So far, the central bank has acted with caution, especially as the coronavirus pandemic has proven quite persistent. 

In the corporate arena, traders will be closely looking at the latest profit reports. Yesterday after the market closed, National Beverage (FIZZ), a leading manufacturer of sparkling waters and energy drinks, weighed in with encouraging results. This morning, The Kroger Co. (KR), which operates various food and drug stores delivered positive results and provided good guidance. The company has been implementing a number of strategic initiatives, as it looks to gain market share from larger competitors. The shares have made significant progress over the past year.

Technically, the stock market has retreated over the past few days. However, it remains to be seen if this softness will develop into a larger pullback. For the past year, the market has moved higher with few bouts of profit taking along the way. Buyers have regularly have moved in to scoop up equities at the first sign of weakness, and that has ultimately helped push the market higher.  – Adam Rosner

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