Investors Optimistic for Continued Rally in Short Trading Week
Despite the shortened trading week coming up and the strong likelihood of dismal first quarter results which are due to start trickling in this week, it appears that U.S. stock market traders are optimistic that the current four week market rally will be extended, at least in the short term. Following the much publicized event of markets hitting 12 year-lows, the major stock market indicators have rallied four weeks in a row, despite the disconcerting data on job losses, which have reached two million in 2009 alone, with 5.1 million jobs being lost since January 2008.
It is generally agreed that how the markets respond to first quarter financial results will be a critical indication of investor optimism. The first quarter of 2009 has been referred to as a “throwaway quarter” with many stock market investors expecting bad results, which they have factored into their investment strategies. The fact that orders placed with U.S. manufacturers rose in February, and that inventories are continuing to fall, is seen as an indication that the second quarter, and possibly the third, is likely to level out, with a positive turnaround taking place toward the end of 2009.
Dow component Alcoa is expected to start the ball rolling with the release of their results after market close on Tuesday, with other influential listed companies following after mid-month. As it is highly likely the aluminum producer will report another loss, investors will be looking to the company’s outlook as an investment gauge. Tuesday will also see the release of the Federal Reserve’s consumer credit report for February, which is expected to have fallen by around 1.5 percent, having climbed by 1.8 percent in January. The Commerce Department is expected to release its wholesale inventories report on Wednesday morning, with indications that inventories will have fallen 0.6 percent, being the sixth consecutive decline. With Thursday being the last day of trade for the week, investors will consider the government’s weekly jobless claims report, the import and export price report for March, as well as the Commerce Department’s trade balance report.