Buckle up, investors. The week ahead may offer a bumpy ride.
The week has more than enough of everything: a Federal Reserve meeting, the June jobs report and more than 1,000 earnings reports from companies giant, huge, big and small.
Related: With Fed set to cut rates, this money move may pay off
The schedule comes after a volatile week:
- The S&P 500 fell 0.8%. The Nasdaq Composite fell 2.1%, with the Nasdaq-100 index down 2.6%. Yet, the Dow had a small gain, and the small-cap Russell jumped 3.5% as investors pushed money to non-tech investments.
- The major averages are no longer overbought but, rather, oversold. A key indicator — MACD — suggested the trend for now is lower.
- Kamala Harris has emerged as the Democratic front runner after Joe Biden withdrew his presidential reelection bid.
- Nvidia has fallen nearly 20% from its 52-week high of $140.76 on June 20 and it's unnerving, given the market's big rally from lows in October.
There's the potential for more volatility Friday when the Labor Department issues its jobs report for June.
But markets aren't panicking. It may be more investors who can take profits are doing so — and reinvesting elsewhere. As money manager Jon Markman wrote on Friday, "Success is not supposed to be easy."
A flood of earnings are ahead
This is the biggest week of earnings for the second quarter. Nasdaq estimates nearly 1,095 companies will report results. The lineup includes some of the very largest companies, including:
Microsoft, due after Tuesday's close. Microsoft (MSFT) shares fell 2.7% this past week as investors started selling pricey techs stocks. Microsoft is down 4.9% in July but up 13.1% for 2024. Fiscal fourth-quarter earnings are estimated at $2.90 a share, up from $2.69 a year ago.
Apple, due after Thursday's close. Apple (AAPL) shares fell 2.8% on the week but are up 3.5% on the month and 13.2% year-to-date. The estimate for fiscal third-quarter earnings is $1.34 a share, up from $1.26 a year ago.
Amazon.com, due after Thursday's close. The online retail colossus (AMZN) fell just 0.3% on the week. The shares are down 5.6% for the month but up 20.1% in 2024. The earnings estimate is $1.03 a share, up from 63 cents a year ago.
Meta Platforms, due after Wednesday's close. Facebook parent Meta (META) fell 2.3% on the week and shares are off 7.6% in July. Year-to-date gain: 31.6%. The analyst estimate is $4.69 a share, up from 3.23 a share a week ago.
Others to watch:
- McDonald's (MCD) , due Monday.
- Procter & Gamble (PG) and Merck (MRK) , both Tuesday.
- ARM holdings (ARM) , MasterCard (MA) and Qualcomm (QCOM) , due Wednesday.
- Intel (INTC) and ConocoPhillips (COP) , due Thursday.
- Exxon Mobil (XOM) and Chevron (CVX) due Friday.
The Fed and the jobs report
There are two big economic events this week. First is the Federal Reserve meeting that starts Tuesday. There are calls for the Fed to cut rates now, but the betting is the earliest date will be September. A few economists are predicting December for the first cut. Click on the link below for more.
Related: Fed meeting will light the path to lower rates
The Fed's key rate — the federal funds rate — has been at 5.25% to 5.5% for about a year as the Fed has fought inflation pressures.
More Wall Street Analysts:
- Analyst revisits Nvidia stock price target after Blackwell checks
- Analysts prescribe new Walgreens stock price targets after earnings
- Analyst revises Facebook parent stock price target in AI arms race
Bond yields have been sliding, as if traders see rates heading lower. According to Freddie Mac, the national rate on 30-year mortgages was 6.75%, down from 7.8% in November but up from about 3.2% at the end of 2022.
For many buyers, that's too high, and sales nationally have been challenged all year.
As important as the Fed meeting? That's the jobs report due Friday from the Labor Department.
The consensus estimate is that the U.S. rate will stay at 4.1%, with payroll employment rising by 185,000 jobs. A negative surprise — a large jump in the unemployment rate or a big drop in payroll employment — might pressure on financial markets.
Admittedly, the jobs numbers are estimates subject to two revisions when the reports for July and August come out.
Also of interest is the S&P CoreLogic Case-Shiller Home Price Indices, which measure home-price changes in markets around the country. It has been consistently reporting home prices rising.
Lastly, the Chicago Purchasing Managers report on Wednesday offers a glimpse on whether companies are buying stuff to do their jobs or cutting back.
Related: Veteran fund manager sees world of pain coming for stocks
