As of Wednesday, it appears that the stock market is being cautious, with futures indicating a small drop in the opening. Traders are preparing themselves for a variety of key events including the meetings to address the debt ceiling talks between the House Republicans and the US government, a speech from the Treasury Secretary Janet Yellen, the Federal Reserve meeting minutes from May, and the earnings report from technology company Nvidia Corp.
Review of Trading on Tuesday:
Concerns over debt ceiling negotiations, high bond yields, and low manufacturing activity data led to sharp drops in the major averages on Tuesday.
Although the indices started slightly lower and were sluggish in early trading, the selling intensified in the afternoon, and averages declined before balancing around lower levels, while energy stocks resisted the downtrend due to the rising prices of oil.
|S&P 500 Index||-1.12%||4,145.58|
Analysis of the Market:
There is a large amount of cash on the sidelines waiting for the right time to flow into the market; this is why the market may be waiting for a single positive influence to boost it, according to fund manager Louis Navellier. He added that the positive influence could come from the technology sector, such as Apple’s new iPhone announcement in September.
Navellier states that given 2024 is a Presidential election year, the Federal Reserve may begin lowering interest rates later in 2023 or early 2024 to avoid being part of the economic debate. This could provide the market the spark it needs.
Navellier also says that there will be many positive reports on inflation, interest rates, and economic growth, which will coax investors back into the stock market.