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Highlights for the Week Ahead


Market Update

Highlights for the Week Ahead

This week’s Smart News ‘Highlights’ feed covers the key corporate earnings and economic data releases due out between Monday 3rd and Friday 7th August.

Looking at earnings first, the focus swings away from big tech to cover a diverse range of US corporate heavyweights. Bear in mind that last week’s stellar results from Alphabet (Google), Amazon, Apple and Facebook saw the latter two companies soar to fresh record highs, helping to boost the tech-heavy Nasdaq indices. The Nasdaq 100 is now up 13% from the old record high hit in February this year, and it’s also up 65% from the March lows hit during the early part of the coronavirus pandemic lockdown. Meanwhile, the broader-based S&P 500 is up 50% from the March low, but it’s still more than 3% below its own February record high. This is yet another dramatic illustration of how the rally in a handful of tech giants has obscured the mixed picture which emerges when taking the wider perspective of the US stock market.

So, this week we have a broader selection of corporate giants reporting their numbers. Things kicked off on Monday with Tyson Foods, the world's second largest processor and marketer of chicken, beef, and pork, and the biggest US beef exporter. Tyson’s share price rose as the company said it was able to offset a decline in overall sales by raising prices, perhaps an early indication that inflation may soon be an issue for consumers. Entertainment conglomerate Walt Disney reports on Tuesday while Wednesday sees earnings from ‘for-profit’ health insurance company Humana Inc. and energy provider Marathon Oil. It will be of particular interest to see how the latter has fared over the last quarter given the $18 billion loss posted by Royal Dutch Shell (RDS) last week. Earlier this year RDS cut its dividend for the first time since the Second World War following the collapse of global oil prices. On Tuesday BP also posted a large loss and halved its dividend pay-out.

Coca-Cola Enterprises report on Thursday, where we’ll see how sales of its eponymous brand hold up along with other products such as Sprite, Fanta, Capri-Sun, Dr Pepper and Schweppes. On top of this, wholesale giant Costco will provide its latest sales release, giving an insight into how smaller US retailers are coping as the coronavirus death toll continues to cause concern across the country. Unsurprisingly, most of the chatter on social media as picked up by our Smart News ‘Highlights’ feed has focused on how coronavirus will affect earnings and revenues. Disney is expected to take a hit from the closure of its parks and holiday offerings, while the lack of sport should have a serious effect on its dedicated sports channel ESPN. But analysts are hoping that the ‘House of Mouse’ gets a revenue boost from Disney+, the streaming service it launched in November last year.

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There are a number of commentators contributing to the feed who offer in-depth previews of all the major corporate earnings this week, along with a look at the main economic data releases, culminating in Non-Farm Payrolls on Friday. There are other useful snippets in there, including a tweet from The Wall Street Journal reporting that Coca-Cola plans to launch an alcoholic version of its popular US sparkling water brand, Topo Chico, a move to join the “hard seltzer” that has gone down particularly well with CNBC’s ‘Mad Money’ presenter Jim Cramer. Meanwhile, we hear that health insurer Humana has invested $100 million in @HealApp, a ‘telehealth’ start-up. This is a strong indication that Humana sees a big change coming in the way patients interact with physicians – a move no doubt accelerated by the current pandemic.

In terms of economic data, the US Institute of Supply Managers’ (ISM) Manufacturing PMI came out on Monday afternoon and indicated that the manufacturing sector continues to bounce back and expand. The ISM Non-Manufacturing PMI comes out on Thursday. These are both important releases as they are the closest thing to a real-time gauge of business sentiment as it is possible to get. As such, they are viewed as leading indicators. Both surveys plunged below 50 in May, the number that marks a drop into contraction territory, due to the coronavirus pandemic and the associated global lockdown. But they recovered last month, with each pushing back above 50 to show overall expansion in both sectors. The Manufacturing PMI was a touch better than expected, while analysts are forecasting a positive outcome from Thursday’s release as well.

 The Reserve Bank of Australia holds a monetary policy meeting on Tuesday, with the Bank of England rate decision on Thursday. Neither central bank is expected to make any changes to their current positions. Finally, we have the US Non-Farm Payroll release on Friday. We will look at this in more detail later this week in our ‘Inside the Broker’ blog.

There’s a lot to look at in terms of corporate numbers and economic data. But we’re making it easy to follow events with our ‘Highlights’ feed. So, whatever else you do, make sure you click on our Smart News widget and follow this week’s ‘Highlights’. This will give you a comprehensive commentary on all the week’s most important financial events from some of the most influential voices on social media.

 

 

 


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