(CNBC, Sat. July 18th, 2020) – Earnings season is in full swing, and dozens of companies report in the week ahead, including Microsoft, Intel, American Express, Tesla and Twitter.
Congress is expected to begin to debate in earnest a new trillion dollar plus stimulus package that would address state and local government aid and the soon-to-expire enhanced unemployment benefit that pays individuals an extra $600 a week.
After a surge of outperformance, Nasdaq reversed course and lagged the other major indices in the past week, and traders say they are watching to see if the tech and other names in the index will let out steam slowly or correct more sharply.
Investors are braced for a barrage of earnings news, and the debate in Washington around the next stimulus package may also be an important catalyst for markets since it has implications for the economic recovery.
Big tech names, including Microsoft, Intel, Twitter and IBM, are among companies reporting in the week ahead, as is high-flying Tesla. Blue chips Coca-Cola, Verizon, American Express and Travelers are also among the dozens of major companies releasing results.
Congress returns from its break and should pick up the pace of negotiations towards a new fiscal stimulus package, which is expected to address aid for state and local governments and enhanced unemployment benefits. Unemployment benefits, including the $600 additional weekly payment now going to millions, is expected to be a hot topic of discussion, as the benefit ends on July 31.
There are just a few items of note on the economic calendar, including existing home sales on Wednesday, unemployment claims data on Thursday and new home sales on Friday.
The spread of the coronavirus will also be closely monitored, as well as any signs of medical progress. The Lancet medical journal is expected to release early stage human trial data Monday on a vaccine developed by Oxford University and AstraZeneca.
‘Push and pull’ in market
Investors also will be watching the market’s own dynamics in the week ahead. There is tension within the market between the bubbly run-up of tech and momentum names on the Nasdaq, and the broader market, or S&P 500, which is basically still flat for the year. The Nasdaq is up 17% year to date, but in the past week lagged other indices, turning in a loss, while the Dow and S&P 500 were both higher.
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com