Will the US earnings season continue to distract investors from America’s disastrous covid-19 headlines?
US: Earnings season
Broadly, the US earnings season – especially updates from the likes of JP Morgan and Goldman Sachs – has been a welcome side show for the Dow Jones et al.
It has allowed the markets to sporadically turn away from the nightmarish covid-19 numbers coming out of the United States, including the fact that California has effectively had to re-enter lockdown to try and keep a lid on its most recent spike.
And with the daily number of new cases continuing to come in between 60,000 and 70,000, there is not a lot of let up to be had in the immediate future.
Luckily for distraction-seeking investors, there are plenty more big names reporting this week. IBM are up on Monday, while Coca Cola may struggle to match PepsiCo’s snacks-led outperformance on Tuesday.
Wednesday is the real hot date, with both Tesla and Microsoft making an appearance. Analysts are expecting Elon Musk’s company to post a quarterly loss of 63 cents per share – bafflingly that’d be a 43.8% improvement year-on-year – alongside a 21.6% drop in revenue to $4.98 billion.
As for Bill Gates and the gang, Microsoft – potentially benefiting from a lockdown surge in tech purchases, be it software or hardware – is forecast to post an 8.5% increase in revenue to $36.59 billion, with a 2.2% jump in earnings to $1.40 per share.
Rounding out the week, Twitter – which could see an uptick in user and engagement metrics – and Intel update on Thursday, with Verizon releasing its latest figures on Friday.
As for the economic calendar, that’s not quite as packed. Existing home sales arrive on Wednesday, with the usual weekly jobless claims figure on Thursday.
Friday has the most relevant releases in the form of July’s flash manufacturing and services PMIs. In June both numbers neared, but failed to reach, the crucial 50.0 mark, so investors will be hoping the PMIs can cross that level this week.
UK: Market sentiment
Set to ride the waves of market sentiment once again, the UK doesn’t have too much on its plate this week – at least not until Friday.
The public sector net borrowing reading is released on Tuesday, with the CBI industrial order expectations figure on Thursday. Then, at the end of the week, there is the flash manufacturing and services PMIs – which hit 50.1 and 47.1 respectively in June – alongside the latest retail sales reveal.
Eurozone
Echoing the US and UK, the Euzorone sees its current account figures on Monday, consumer confidence on Thursday, and the flash manufacturing and services PMIs for Germany, France and the region as a whole on Friday.
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