The overall market and many of its constituents felt a pretty big sell-off last week with the S&P 500 ($SPX) (SPY) closing the week down almost 2%. This was exacerbated on Friday when a botched update at Crowdstrike Holdings (CRWD) took down global IT systems.
To further compound the issue the USDJPY seemed to start to run again and oil found itself selling off pretty violently in the Friday session.
This means that all eyes will be on the open this Monday to see if it continues the drop from last week or if it starts to turn around. In addition, we have some news releases and some big names in earnings.
Here are 5 things to watch this week in the Market.
Earnings
There are some big names releasing earnings this week starting Tuesday with Google (GOOG) and Tesla (TSLA). Both of these names have the potential to move the market if they come out with a big surprise in either direction. Google will most likely talk about their AI as well as their cloud computing, but this did not save several tech names last week from selling off. Tesla has the potential to surprise in either direction, but with the price cuts in prior quarters, they will likely need to see a spike in orders to offset possible revenue loss.
Some other names reporting next week are Waste Management (WM), AT&T (T), Visa (V), Coca-Cola (KO), and 3M (MMM). Individually these names are not likely to move the entire market, but they could provide an insight into consumer habits as money continues to get tight in the US.
Flash PMI
Wednesday morning at 9:45 the Flash services and manufacturing PMI are both due out. These are leading indicators of economic health and display the perceived expansion or contraction in the markets. The last several months have seen some expansion in economic activity based on these reports, but given how we have seen a potential shift lately in July with economic data it will be interesting to see if the trend continues. If these come in weak we could see the market drop on poor economic data. Alternatively, if we hit or beat the expectations we could see the market rally on good news.
Advanced GDP
Advanced GDP is out Thursday and this is often a market mover that has the potential to set the tone for the trading day. This is the advanced which means it's the estimated Q2 GDP value, but holds the most potential to move the market since it's the first look at the quarter. If this comes in strong we could see a strong reaction in the S&P on a resilient economy. If we come in weak we could see the opposite reaction.
Core PCE
Friday Core PCE is out, and this is an inflation measure that looks at the change in goods and services purchased directly by consumers. With many governmental measures of inflation starting to ease, it will be interesting to see if PCE follows suit. If we miss estimates and come in low, its possible we see a strong rally in the market on a possible confirmation of a rate cut. If we beat the estimates we could see some selling in the S&P on the potential for the Fed to hold off on a rate decision. One additional thing to watch here is any revision of last month's number. Over the last 4 months, 2 have been revised higher the following month.
US Politics
Political preferences aside, the US Political scene has been very interesting over the past few weeks. This week we could see more excitement with a potential decision from the incumbent not to continue his bid for the Democratic nomination. This decision, coming fairly late in the election cycle, could have implications on the market, especially if he endorses another candidate.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
