Investors are hoping to start the month of May off on firmer footing after U.S. stock indexes dropped 1 percent on April 30th and investors wait for more economic data to confirm the strength of economy and the likelihood of an interest rate hike in the approaching months.
Today’s 10:00 am ISM report for April will provide some insight into the strength of the economy in the second quarter of 2015 which come on the heels of a weaker than expected reading of first quarter U.S. GDP two days ago on April 29th that showed the U.S. economy only grew 0.2 percent, reflecting less robust economic growth due to a combination of cold weather, falling oil prices, a West coast port strike, and a rising U.S. dollar.
Briefing.com expects an ISM reading of 51.0 in April which would be slightly lower than March’s 51.5.
Construction spending (March), Auto-tuck sales (April), and Michigan Sentiment also due at 10:00 am are also expected to impact U.S. equities today.
In recent days, the yield on the 10 year Treasury has climbed above 2 percent even despite a weak first quarter GDP reading and ongoing uncertainty about the timeline when the Federal Reserve will begin to raise interest rates.
A weaker U.S. dollar in recent weeks is giving some relief to U.S. companies with global exposure and could help to further stabilize U.S. growth.
But a strong ISM report today could add some spark for the U.S. dollar to gain momentum which comes as Japan’s central bank offered no added stimulus this week and hope continues to build that Greece will be able to reach a new bailout deal with its creditors in the days ahead.