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Top 5 Things To Watch In The Stock Market This Week

U.S. Stock Futures Retreat As Coronavirus Cases Surge To Record High

U.S. stock futures started the week on a lower note as the stimulus deal remains elusive and coronavirus infections hit a record for a second day. The concerns are mounting that surging coronavirus cases could force additional business closures as the U.S. added more than 85,000 cases in a record figure in one day. The record number of new infections on Friday came after outbreaks in Sun Belt states. The number is higher than the previous record of about 76,000 cases in the middle of July. 

Investors are looking to brace for more weakness within the stock market as we start the week. The major indexes are all trading in the negative territory. The Dow, S&P 500, and Nasdaq 100 futures were all in negative territory, moving 0.88%, 0.85%, and 0.72% lower respectively as of 7.02 a.m. ET. The major indexes are coming off their first losing week in four as hope for another stimulus aid is fading. Investors are also keeping their eyes on Big Tech Stocks and large-cap corporate earnings as key financial data this week.

Major Focus On Big Tech Earnings

This week will probably be the most important earnings week season to watch as many of the tech giants are disclosing their earnings for the third quarter. Tech stocks have lost some of their shine in recent weeks. But no matter how you slice it, technology still remains the undisputed leader in the stock market today. After all, major players in the space still account for a significant part of the market’s gain since the pandemic.

Several well-known companies that drive the market will be reporting include Microsoft (MSFT Stock Report), Apple (AAPL Stock Report), Amazon (AMZN Stock Report), Alphabet Inc. (GOOGL Stock Report), Facebook (FB Stock Report), and Shopify (SHOP Stock Report). As such, there will be a lot on the line when the big-name, mega-cap tech companies report their respective results in the days ahead.

“The set-up for Thursday 10/29 when all four report is getting more challenging post SNAP, but we expect the ‘rising tide’ of e-commerce use and DR [direct revenue] advertising to broadly justify stock moves,” BMO Capital Markets analyst Daniel Salmon said in a note Friday.

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Can Investors Still Expect A Stimulus With Talks Stalled?

Investors, and basically everyone else have spent recent weeks clamoring for a new aid. It is also reasonable to assume that failure to pass a fresh stimulus would endanger the nation’s rebound. U.S. House Speaker Nancy Pelosi and White House appeared to be pointing fingers at each other for the stall in negotiations. Many are becoming increasingly pessimistic that a new coronavirus stimulus could be passed before Election Day.

“At this point in time, Friday before the Monday we’re scheduled to leave, it’d take a colossal get-together, just a huge get-together, to put a stimulus package together, and I don’t see it happening,” said Senate Appropriations Committee Chairman Richard Shelby. “That doesn’t mean it couldn’t happen,” the Alabama Republican added. “Probability, no. Possibility, very, very slim.”

Q3 GDP In The Spotlight This Thursday

The U.S. third-quarter GDP numbers are slated to be released on October 29. It is also expected to have risen by a record amount over the second quarter after pandemic induced lockdowns drove the worst ever single quarter drop in economic activity this year. According to Bloomberg data as of Friday, analysts expect the third-quarter GDP to rise at a seasonally adjusted annualized rate of 31.8% following a 31.4% slump in the second quarter.  

While the upcoming GDP report will give a clear picture at the July through September period, investors are mostly already looking ahead. There are concerns that another wave of the pandemic might occur during the winter months. Besides, the uncertainty of the stimulus package and election outcome are occupying the minds of investors.

[Read More] 3 Coronavirus Stocks To Watch After Gilead Secures FDA Approval For Remdesivir

Major Biotech Stocks Reporting Vaccine’s Treatments

Pfizer (PFE Stock Report) and BioNTech (BNTX Stock Report) could release interim effectiveness data on their coronavirus vaccine candidate from final-stage trials any day from now, with a possible FDA approval request by late November. Moderna (MRNA Stock Report) could follow a few weeks later.

The third wave of COVID-19 in the U.S. appears to be worse than the first two. The need for a safe and effective vaccine couldn’t be more pronounced. In the most ideal scenario, millions of coronavirus vaccine doses will be out before year-end, targeting those most at risk. But realistically, it would still take many months to vaccinate most Americans. And that’s assuming there is no vaccine hesitancy among the general public. Also, both Pfizer and Moderna will report earnings this coming week. They could also detail the progress of their vaccine developments.

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