Top 5 things to watch in the markets for the coming week


By Noreen Burke – A Great Week For Profits Including Reports From Amazon and Alphabet, the stimulus talks in Washington and the first jobs report of 2021 will all be major events to watch in the coming week, but they will likely be overshadowed by the standoff between retail investors and Wall Street hedge funds. . Investors will be watching closely to see if short-term pressures from retail investors continue into what could be a bumpy week for stocks. Here’s what you need to know to start your week.

  1. The big pressure

Last week, retail investors using Robinhood and other apps led a frenzied rally of shares from GameStop (NYSE :), AMC (NYSE 🙂 and other defended companies on social media platforms, including Reddit’s WallStreetBets, which had been heavily bypassed by hedge funds.

U.S. stock indices suffered their biggest weekly decline since late October, as short-term pressures saw hedge funds sell stocks to cover losses, despite positive earnings results from market heavyweights like Apple (NASDAQ 🙂 and Microsoft (NASDAQ :).

Some market watchers fear the wild rally could be a further sign of overexuberance that could herald volatility for the wider stock market, while others believe it is more of a side effect.

  1. Earnings

As the quarterly earnings season is in full swing, market participants are looking at whether companies can justify high valuations.

“Overall the surprises have been positive, even more than usual and large companies are showing positive operating leverage where they are able to grow their profits a little faster than they are able to grow. their income, ”said Ellen Hazen, portfolio manager at FLPutnam Investment Management in Wellesley, Massachusetts.

Tech giants Alphabet (NASDAQ 🙂 and Amazon (NASDAQ 🙂 are both expected to report after the market closes on Tuesday, followed by Qualcomm (NASDAQ :), Snap (NYSE 🙂 and Pinterest (NYSE 🙂 later. during the week.

Some big names in the closely watched health sector are also worth mentioning, including Pfizer (NYSE :), GlaxoSmithKline (NYSE :), AbbVie (NYSE :), Biogen (NASDAQ :), Gilead Sciences (NASDAQ :), Merck (NYSE 🙂 and Bristol-Myers Squibb (NYSE :).

  1. January employment report

The January report on the non-farm payroll will give markets a first glimpse of the health of the labor market inherited by US President Joe Biden.

The report is expected to show slight after the economy shed 140,000 jobs in December (mostly in restaurants and bars), but more substantial improvements are unlikely to happen until the economy reopens more widely. The unemployment rate is expected to remain unchanged at – almost double the level it was just before the pandemic.

Federal Reserve Chairman Jerome Powell said last week that economic recovery depends on progress in the rollout of immunization. “There is nothing more important to the economy than getting the vaccine,” said Powell.

  1. Stimulus hopes

The Democratic-led U.S. Senate and House of Representatives are set to take their first steps in providing new financial assistance to families and businesses affected by the pandemic that has killed more than 433,000 Americans.

The Senate is due to start work on the legislation this week, despite doubts among Republicans and some Democrats about the size of the $ 1.9 trillion package proposed by President Biden.

Biden said on Friday that Congress must take immediate action, adding that most economists believe further economic stimulus is needed.

The president also said he supported moving aid to COVID-19 with or without Republican help.

The US national debt has exploded 40% under Donald Trump and expectations of further stimulus were among the factors that recently pushed Treasury yields to 10-month highs.

  1. Talk Fed

There is a flurry of Fed speakers set to make appearances to discuss the job market and the economy in the coming week.

Atlanta Fed Chairman and Boston Fed Chief will speak on Monday, while New York Fed Chairman John Williams and the Cleveland Fed chairman are scheduled to deliver a speech Tuesday.

On Thursday, the St. Louis Fed chairman, the Philadelphia Fed chief, the Cleveland Fed and the Chicago Fed chairman are scheduled to appear.

–Reuters contributed to this report


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