Markets performed well to start a new trading week, following two down-days to close out the previous week, on forward outlooks for coming quarterly earnings reports that appear fairly promising, such as Apple AAPL and Facebook FB — both of which report this Thursday. We also were greeted this morning of an advance to phase 3 testing on the COVID-19 vaccine candidate from Moderna MRNA, and Durable Goods Orders for June which showed May’s pent-up demand was not just a one-time anomaly.
The Nasdaq outperformed other major indexes Monday, though all closed in the green: the tech-heavy market finished +1.67% or 173 points, closing at 10,536. The small-cap Russell 2000 rose 1.17% to 1485. The S&P 500 and Dow followed, up 0.74% and 0.43% to 3239 and 26,585, respectively. Aside from Big Tech earnings report, there will be a hearing on Capitol Hill with the aformentioned companies, plus Alphabet GOOGL and Amazon AMZN, reportedly addressing anti-trust and monopolistic tendencies at the companies, some of which now have market cap levels over $1 trillion.
No one expects Congress will demand these tech giants be broken up into different companies, though some pointed questioning will no doubt be on the agenda from committee members. Most of the tech officials have been in this situation before, and tend to have such a more well-defined command of their institutions than elected officials do, that often the elected officials cannot effectively lay a glove on company leaders. We’ll see if anything changes this week.
The Senate GOP has unveiled what it calls the HEALS Act (Health, Economic Assistance, Liability Protection and Schools) as its extended benefits from the soon-t-expire CARES Act. Some highlights presented by Senate leader Mitch McConnell are $1200 direct payments to citizens, $100 billion in schools aid, including PPE, and keeping companies from being liable for coronavirus cases that come about in the future. Details are not complete, but there does not appear to be a focus on funding state and local governments, such as one of the main focal points of the House Democrats’ HEROES Act of extended benefits, passed two months ago.
In all, it’s going to be a busy week. Aside from perhaps the single-busiest week for Q2 earnings season and congressional aid to deal with the ongoing pandemic’s affect of the U.S. economy, we’ll also see reports on Consumer Confidence, Cash-Shiller home prices, Advance Trade, the initial read on Q2 GDP, a presser with Fed Chair Jay Powell, and, of course, new Initial and Continuing Jobless Claims, coming out Thursday morning.
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