Earnings bonanza, Yellen's new recession prediction and more: Monday's 5 things to know
Despite US market losses on Friday, all three indexes managed to post weekly gains, with the S&P 500's 2.5% gain capping best week of month
Here are the key events taking place on Monday that could impact trading.
EARNINGS BONANZA: Investors are bracing for the busiest week of the second-quarter earnings season. Twelve Dow members are scheduled to report, as well as 170 companies in the S&P 500, or just over one-third of the benchmark index. The big focus will be the mega-cap consumer/tech titans, specifically Alphabet and Microsoft on Tuesday, Meta Platforms on Wednesday, and Apple, and Amazon on Thursday. Other names to watch include General Motors, GE, Ford, Comcast, Northrop Grumman, Charter Communications and Exxon Mobil.
U.S. Treasury Secretary Janet Yellen has issued a new inflation prediction and admitted an analysis she offered in May on inflation was wrong. (Chung Sung-Jun/Getty Images / Getty Images)
YELLEN’S CHANGES ON INFLATION : Despite admitting in May she’d been wrong about the path inflation would take, Treasury Secretary Janet Yellen said Sunday she expected the Federal Reserve’s policies to be "successful." "The Fed is charged with putting in place policies that will bring inflation down. And I expect them to be successful," Yellen told anchor Chuck Todd on NBC News’ "Meet the Press," Sunday after downplaying recession fears. The Biden administration, including Yellen, previously dismissed concerns about rising costs and said the contributing factors were "transitory."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 44782 | -128.65 | -0.29% |
| SP500 | S&P 500 | 6047.15 | +14.77 | +0.24% |
| I:COMP | NASDAQ COMPOSITE INDEX | 19403.947849 | +185.78 | +0.97% |
MARKET VOLATILITY: Despite Friday's U.S. market losses, all three indexes posted weekly gains. With a 2.5% rise for the week, the S&P 500 capped its best week in a month. Nonetheless, few investors are willing to call a bottom to a selloff that has dragged the S&P 500 down 17% this year. Persistently high inflation, the possibility of a recession and the war in Ukraine remain at the forefront of investors' minds. Next week's meeting of the Federal Reserve, as well as coming gross domestic product data, could inject more volatility in the markets.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| META | META PLATFORMS INC. | 592.83 | +18.51 | +3.22% |
| GOOGL | ALPHABET INC. | 171.49 | +2.54 | +1.50% |
| TWTR | NO DATA AVAILABLE | - | - | - |
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TECH STOCK RECAP: Megacap technology companies Meta Platforms and Alphabet pulled back last week, falling $13.90, or 7.6%, to $169.27 and $6.44, or 5.6%, to $107.90, respectively. Meanwhile, American Express shares rose $2.83, or 1.9%, to $153.01 after the company reported a 31% rise in revenue. Among other individual stocks, Twitter shares erased earlier declines and rose 32 cents, or 0.8%, to $39.84 after the company posted a loss and noted that revenue was hurt by uncertainty related to Elon Musk's acquisition.
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EUROZONE ECONOMY CONTRACTS: Investors continue to maintain a close eye on Europe, which has been beset by concerns about the cost of living and an energy crisis that could push economies into recession. On Friday, fresh business surveys suggested the eurozone economy contracted in July. Excluding pandemic lockdown months, this would mark the first contraction signaled by purchasing managers' indexes since 2013. Still, the pan-continental Stoxx Europe 600 gained 0.3%. Traders remain focused on the flow of Russian natural gas through the critical Nord Stream pipeline, as well as the ripple effects from the resignation of Italian Prime Minister Mario Draghi. The index ended the week up 2.9%.