S&P 500; US Indexes Fundamental Daily Forecast – Stocks Continue to Grind Higher on Low Volume

U.S. stocks were up again on Monday, but the volume was extremely light. Nonetheless, the Dow Jones Industrial Average was still able to hit an intraday record. A higher close today will be the blue chip average’s ninth straight record close. The benchmark S&P 500 Index was nearing a record high and the tech-based NASDAQ Composite was in a position to post a gain after several days of sideways trading action.

There were no major economic reports on Monday. However, earnings season continued although the releases came at a much slower pace than the previous weeks. According to FactSet, calendar second-quarter earnings have grown 10.1 percent as of Friday. S&P Capital IQ originally forecast earnings to grow by 6.2 percent.

This week’s earnings will be highlighted by retailers Macy’s and Nordstrom. Media giants Disney and News Corp are also scheduled to report later in the week.

Minneapolis Federal Reserve Bank President Neel Kashkari was expected to give a dovish speech about Fed policy. Instead, he gave a speech on President Trump’s proposed immigration plan. Kashkari said reducing immigration to the United States will reduce economic growth.

St. Louis Fed President James Bullard did address Fed policy. He said the Federal Reserve can leave interest rates where they are for now because inflation is not likely to rise much even if the U.S. job market continues to improve.

“The current level of the policy rate is likely to remain appropriate over the near term,” Bullard told the America’s Cotton Marketing Cooperatives 2017 Conference in Nashville, Tennessee.

Bullard also noted that the dollar had declined in value this year, chalking that move up largely to improved growth forecasts for Europe and the expectation that the European Central Bank will respond by tightening monetary policy.

Bullard also said recent readings of low inflation are “concerning” because they may be temporary but indicative of persistent factors such as better technology that is driving down the price of many goods and services.

The comments by Bullard could be read as bullish since stock traders like low rates.