US stocks are set to begin a quick week of earnings in a sluggish way.
Apple AAPL,
Tesla TSLA,
Facebook FB,
and Microsoft MSFT,
are ready to report earnings in an action-packed week, which also includes the first political meeting of the Biden Federal Reserve. In fact, nearly a quarter of the S&P 500 will report results – those companies accounting for 39% of the market value index, according to FactSet data.
The COVID-19 pandemic and the launch of vaccines in the US remain in the spotlight as President Joe Biden begins work. Investors will also be watching the fourth quarter US GDP reading closely on Thursday, with MarketWatch economists forecasting a 4% increase. The focus will also be on the recovery in 2021.
In ours call of the day, Goldman Sachs GS,
analysts were strong about the US economy’s recovery in 2021, but said there are three major risks to the recovery. The investment bank forecasts a 6.6% increase in gross domestic product this year, which is 2.5 percentage points above the consensus. A reduction in the risk of the virus, caused by mass vaccination, was expected, along with fiscal support for consumer spending to fuel a “mid-year consumption boom” and “very strong growth” in 2021.
The most serious risk of disadvantage, analysts noted, was the threat of a new vaccine-resistant strain of coronavirus that causes COVID-19 – requiring a new vaccine and another round of inoculation. “Virus-sensitive spending is likely to decline as a new vaccine develops, and although a new vaccine could be approved in less than five months, the consumption boom could be delayed until 2022,” Goldman analysts said. , led by Jan Hatzius, in a note. They added that preliminary evidence suggests that current vaccines protect against the new British strain, but have been more mixed for the South African version.
The second most worrying risk is that viral mutations “significantly increase the bar” for herd immunity, either by being more infectious or by reducing the effectiveness of vaccines. This scenario would also delay the consumption boom. Finally, even if vaccination launches and warm weather reduce the spread of the virus, there is a risk that consumers will be more cautious than expected, although the disadvantage would be limited, they said.
More encouragingly, there were some significant growth risks for Goldman’s GDP growth forecast of 6.6%, including households quickly spending the savings they accumulated during the COVID-19 pandemic and the impact of additional fiscal stimulus in 2021.
Tweet
This Morgan Stanley MS,
the graph shows the NFIB Small Business Optimism Index divergent by Russell 2000 RUT,
indicates that, although sentiment may turn negative, small-cap stocks are on the rise.
markets
US YM00 futures,
ES00,
NQ00,
showed slightly higher before opening, at the beginning of a busy earnings week. European stocks also rose in early trading, helped by online retailers’ earnings and purchase reports
and ASOS ASC,
Asian stocks rose overnight, hoping that some economies will begin to recover from the COVID-19 pandemic, with fewer blockages and progress in vaccine launches.
Buzz
On Sunday, Biden’s top aides began talks with a group of Republicans and Democrats in the Senate over a $ 1.9 trillion coronavirus aid package.
Biden will restore coronavirus travel restrictions against foreign nationals coming to the US from Brazil, the UK, Ireland and much of Europe on Monday, according to reports, adding South Africa to the list.
The White House on Monday revealed details about the new Buy American executive order to be signed by the president. It will raise the threshold and price preferences for domestic goods before the government can buy from a supplier outside the US.
China surpassed the United States as the world’s top destination for new foreign direct investment last year, according to UN figures released on Sunday.
Just days before fourth-quarter earnings, Baird raised its price target for electric carmaker Tesla TSLA,
at $ 728 per share from $ 488, saying that “prejudice for action remains high,” in a note Monday.
GameStop GME,
shares rose 42% in premarket trading, after rising 51% more on Friday. The gains came after the missing sales company Citron Research and the speculative buyers who organize on Reddit confronted the video game retailer.
AMC AMC,
shares rose 34% in premarket trading, as the movie chain raised $ 917 million in equity to help them in the COVID-19 crisis.
Random reading
Flaming Lips organizes a unique concert of “space bubbles”.
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