U.S. stocks opened higher. US stocks continue to shrug off rising COVID-19 cases as markets focus on the strength in stay-at-home stocks (mostly technology), optimism around virus treatments, and Americans’ will to avoid locking down again. The S&P 500 Index is within a small fraction of moving into positive territory for the year. The MSCI Asia Index gained 1.2% overnight, led by Japan’s Nikkei gain of 2.2% and 1.8% for China’s Shanghai Composite. European stocks are up over 1% in midday trading in London.
Earnings season kicks off. The unprecedented nature of the lockdowns and widespread withdrawal of corporate guidance has set up an earnings season that is difficult to predict. Second quarter guidance has been better than average—45% has been positive. Recent economic data has mostly exceeded expectations, pointing to potential upside to FactSet’s consensus estimates, which are calling for a more than 40% year-over-year decline in S&P 500 earnings.
Week ahead. Besides the start of earnings season, this week’s economic calendar includes consumer inflation on Tuesday, the Federal Reserve’s Beige Book on Wednesday, retail sales for June on Thursday, and some housing data on Friday. The international calendar includes European Central Bank and Bank of Japan policy meetings and China second quarter gross domestic product.
The comeback continues. July’s Global Portfolio Strategy: The Comeback Continues reviews the markets and economy for the month of June and gives LPL Research’s insights on what to expect next in equities, fixed income, and more. At your request, we’ve added back a column showing trends in equity asset classes and sectors. The July GPS is available now on the Resource Center.
Midyear Outlook 2020 launches July 14. LPL Research’s Midyear Outlook 2020: The Trail to Recovery reviews where we’ve been in 2020, where we may be heading, and the path that will take us there. Our special elections section explains how stocks and the economy may predict the next president. More information is in today’s LPL Research blog.
No Weekly Market Commentary on July 13. LPL Research will not publish a Weekly Market Commentary this week so we can focus on Midyear Outlook 2020, which publishes Tuesday, July 14. Weekly Market Commentary will resume July 20. We look forward to sharing Midyear Outlook 2020 with you.
COVID-19 news. Total new daily cases in the United States remained at record highs of more than 60,000 over the weekend, according to Johns Hopkins data. Florida’s more than 15,000 new cases on Sunday eclipsed the US record for one state during the crisis. New York reported no new COVID-19 deaths for the first time in four months. Pfizer and BioNTech received FDA fast-track approval for their vaccine candidate
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