Stocks rose Monday following the announcement that Biden would not be seeking a second term. What’s in store for the remainder of the week?
All major stock market indices rose on Monday, partly due to the announcement that Joe Biden will not run for a second term. Stocks are set to have a busy week as the second quarter earnings season is in full swing and a key report on inflation will be released Friday.
The Biden announcement appeared to have given new life to Democrats and the stock market, as Vice President Kamala Harri’s chances of winning the election are seen as better than Biden.
The Nasdaq Composite rose about 265 points or 1.5% in the early afternoon. The Dow Jones Industrial Average rose about 115 points (0.3%), while the S&P 500 gained approximately 55 points (1%) As of early afternoon, the Russell 2000 was up 18 points, or 0.8%.
The stock market started off well this week after the worst week since April. The S&P 500 dropped 2% and the Nasdaq fell 3.7%.
NVIDIA (NASDAQ : NVDA) was one of the worst-hit tech stocks, falling 8.5% in a week due to concerns about trade restrictions in China on semiconductor stocks and its already high valuation. NVIDIA recovered, rising 4.3% to $123 per share on Monday, riding the tech stocks rally.
Alphabet and Tesla report earnings this week
Alphabet and Tesla report earnings this week
Alphabet (NASDAQ GOOG) released its earnings after the market closed on Tuesday. Analysts expect earnings of $1.84 a share, up by 28% over the past year, and revenue of 84.2 billion dollars, up by 13%.
Wall Street analysts are looking for continued growth in the cloud computing business and its AI initiatives. Alphabet’s results could boost tech stocks if positive or drag them down if disappointing.
The EV maker Tesla is expected to release its earnings on Wednesday, after the close of the market. It is expected that earnings will decline. Analysts expect a 33% drop in earnings per share to 61 cents, with sales rising slightly to $25 billion. This is after the car manufacturer reported better than expected deliveries.
Visa (NYSE:V), the world’s biggest payment processor, will also release its earnings for Q2 on Wednesday. Visa provides insight into consumer confidence and spending. Investors will be hoping that the results are similar to those of American Express, its rival.
Watch for earnings from Coca-Cola, Moodys and GE Aerospace this week. Also watch AT&T, IBM and Chipotle Mexican Grill on Wednesday.
Friday’s Inflation Report
Friday’s Inflation Report
The trend of falling inflation rates over the last three months has created a positive momentum. The Federal Reserve’s key price indicator, the Personal Consumption Expenditures report (PCE), is released on Friday. It is highly anticipated.
The PCE index dropped each of the last two months, to 2.6% in may. The PCE index will likely fall again in June after the Consumer Price Index (CPI) dropped to 3% from 3.3% in June.
A further decline in PCE would indicate that inflation rates are falling steadily toward the Fed’s 2% target and will increase expectations for a rate cut in the second half. This could lead to a rally in the stock market.
On Thursday, the Q2 Gross Domestic Product, or GDP, which is a barometer of the growth in the economy, will be released. Economists predict that the GDP will have grown by 1.9% in the second half of the year, up from 1.4% the first quarter. Investors will closely monitor if economic growth exceeds or falls short of expectations.
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