With Inflation Data And Earnings Expected This Week, Dow Ticks Higher

According to Jim Vogel, executive vice president at FHN Financial in Memphis, "For the most part, investors remain in a complete wait-and-see mode to see which banks recover faster than others from March concerns and to see what might be next as far as management guidance is concerned", he explained. "It appears that you're going to get a sense that the Fed will have to raise rates within several weeks, which would take some of the optimism from last week that the Fed might not have to raise rates for a while," he told me over the phone.

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As of Monday, tech companies sensitive to interest rate changes gained 15% year to date, outperforming an almost 7% rise for the S&P 500 and a 1.2% rise for the Dow, while prior hopes the Federal Reserve's rate hike program would be coming to an end helped tech companies gain 15% year to date.

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However, new data released last Friday showed the United States has added 236,000 fewer jobs in March than was expected, undermining hopes that hiring would slow significantly and potentially opening the door for a second interest-rate hike in May. It was predicted that 238,000 new jobs would be created by economists polled by The Wall Street Journal in its recent report. As expected, the unemployment rate dropped to 3.5% from 3.6% in February while hourly wages increased by a modest 0.3% in February.

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A Stifel, Nicolaus & Co. economist, Lauren Henderson, said the employment report was solid and gave the Fed the green light to raise rates in May. According to her, the market is still digesting what happened in the entire banking sector, which is putting pressure on expectations for further rate increases after May.

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A number of analysts also expressed concern about geopolitical matters. As a result of three days of large-scale combat exercises conducted around Taiwan on Monday, the Chinese military said that it is "ready to fight" and had completed three days of training to seal off Taiwan as a response to the trip of the Taiwanese president to the United States last week, according to Trade Algo.

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