US equities are set to begin a muted week of earnings.
Apple AAPL,
Tesla TSLA,
Facebook FB,
and Microsoft MSFT,
are ready to report their revenue in an action-packed week that also includes the first policy meeting of the Biden Government of the Federal Reserve. In fact, almost a quarter of the S&P 500 will report the results – according to FactSet data, the companies represent 39% of the index by market value.
The COVID-19 pandemic and the deployment of vaccines across the US remain in focus while President Joe Biden goes to work. Investors will also be watching the US GDP reading closely in the fourth quarter on Thursday, while economists polled by MarketWatch expect a 4% rise. Attention will also fall on the recovery in 2021.
In us call of the day, Goldman Sachs GS,
analysts were positive about the downturn in the U.S. economy in 2021, but said there are three major risks to the recovery. The investment bank predicts gross domestic product growth of 6.6% this year, which is 2.5 percentage points above the consensus. It expected a reduction in virus risk, brought about by mass vaccination, coupled with fiscal support for consumer spending to fuel a ‘surge in mid-year consumption’ and ‘very strong growth’ in 2021.
The biggest negative risk, according to the analysts, was the threat of a new vaccine-resistant strain of the coronavirus causing COVID-19 – which requires a new vaccine and another round of vaccinations. “Virus-sensitive spending is likely to decline while a new vaccine is being developed, and although a new vaccine could be approved in less than five months, the consumption boom is likely to be delayed until 2022,” Goldman analysts led by Jan Hatzius said. said. in a note. They added that preliminary evidence indicated that current vaccines did protect against the new British strain, but that they were more mixed for the South African variant.
The second greatest risk is that virus mutations “significantly increase” the measure of herd immunity, either by being more contagious or by reducing the effectiveness of vaccines. This scenario will also slow down the consumption boom. Finally, even though vaccination by the vaccine and the hot weather reduce the spread of viruses, the risk is that consumers will be more cautious than expected, although the disadvantage would be limited, they said.
More encouraging was that Goldman’s GDP growth forecast had 6.6% upside risks, including that households are spending the savings they built up during the COVID-19 pandemic and the impact of further fiscal stimulus in 2021.
The tweet
This Morgan Stanley MS,
graph shows that the NFIB Small Business Optimism Index deviates from the Russell 2000 RUT,
index, which suggests that while sentiment may be negative, small-cap stocks are rising.
The markets
US futures contract YM00,
ES00,
NQ00,
at the beginning of a busy earnings week slightly higher before the open point. European equities also rose in early trading, aided by earnings and acquisition reports by online retailers Boohoo BOO,
and ASOS ASC,
Asian stocks climbed overnight, hoping that some economies would begin to recover from the COVID-19 pandemic with the loss of closure and the deployment of vaccines.
The buzz
Biden’s top aides began talking to a group of moderate Republicans and Democrats in the Senate on Sunday about a $ 1.9 billion coronavirus relief package.
According to reports, Biden will again impose travel restrictions on foreign nationals coming from Brazil, the United Kingdom, Ireland and much of Europe to the US on Monday, and added South Africa to the list.
The White House on Monday released details of the new Buy American executive order to be signed by the president. This will increase the threshold and price preferences for domestic goods before the government can buy from a non-US supplier.
According to UN figures released on Sunday, China conquered the US last year as the world’s best destination for new foreign direct investment.
Just days before fourth-quarter earnings, Baird reached its price target for electric car maker Tesla TSLA.
to $ 728 per share from $ 488, saying ‘share bias remains upside down’, in a comment Monday.
GameStop GME,
shares rose 42% in trading on the market, after rising 51% on Friday. The gains came after short-selling firm Citron Research and speculative buyers who organized on Reddit clashed over the video game retailer.
AMC AMC,
the stock rose 34% in market trading as the movie theater chain raised $ 917 million in equity to help it through the COVID-19 crisis.
Random reading
Flaming Lips presents unique ‘space bubble concert’.
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