What to expect in the week ahead (LEVI, SGH)

Moomoo Breakfast US wrote a column · Jul 5, 2021 11:17

What to expect in the week ahead (LEVI, SGH)

By Jimmy

Weekly market recap
For the week, the $S&P 500 Index (.SPX.US)$advanced 0.67%, the $Dow Jones Industrial Average (.DJI.US)$gained 1.02%, and the $Nasdaq Composite Index (.IXIC.US)$rose 1.94%.

The year's second half started in the way the first half ended, with stock indexes levitating a bit day by day, bond yields drifting lower, and options-based volatility measures edging toward somnolence. Not even Friday's news of a stronger-than-expected June jobs gain could disturb the mellow mood, which might reflect the focus of traders and investors on the long Independence Day weekend, rather than the markets.
The 850,000 jump in nonfarm payrolls handily topped economists' guesses that centered around 720,000, in contrast to misses on the downside in the two preceding months. As in April and May, the latest increase was powered by another big jump (343,000) in leisure and hospitality positions as the economy continued to reopen following pandemic-related restrictions.

Here's a look at the returns of S&P 500 sectors.

The week ahead in focus

Prior to the upcoming earning season, only two companies will release their latest results toward the end of this week. $SMART Global (SGH.US)$will report on Tuesday, followed by $Levi Strauss & Co. (LEVI.US)$on Thursday.
The four-day trading week could see stocks drift, after hitting new highs this past week. The closely watched 10-year Treasury yield has held under 1.5%, a positive for tech which outperformed with a 3.2% gain for the week.

There are very few economic reports of note, aside from ISM services data on Tuesday. But the Fed's minutes from its last meeting will be released Wednesday afternoon, and there is potential for the market to learn more about the central bank’s behind-the-scenes discussions on winding down its quantitative easing program.
The highlights next week will be on the economic and policy fronts, with little corporate news.

Monday 7/5
The Fourth of July celebrates the day delegates from the 13 colonies adopted the Declaration of Independence, marking the birth of American independence.
U.S. stock and bond markets are closed on Monday for Independence Day.

Tuesday 7/6
The Institute for Supply Management releases its Services Purchasing Managers’ Index for June. Consensus estimate is for a 63 reading, slightly lower than the May data, which was a record. The Services PMI has also had 12 consecutive monthly readings higher than the expansionary level of 50.

The Reserve Bank of Australia announces its monetary-policy decision. The central bank is expected to keep its cash target rate unchanged at 0.1%, as parts of the country have entered lockdown again to fight the Delta variant of the virus that causes Covid-19.

Wednesday 7/7
The BLS releases the Job Openings and Labor Turnover Survey for May. Economists forecast 9.3 million job openings, matching the April figure, the highest since the data were first collected in December 2000.

The Federal Open Market Committee releases minutes from its mid-June monetary-policy meeting. Fed officials signaled that interest rates would rise sooner and faster than Wall Street had expected prior to the meeting, as inflation is rising at its fastest pace since 2008. Seven officials now expect rates to be lifted next year, compared with four in March.

The Mortgage Bankers Association reports mortgage applications for the week ending on July 2. Mortgage applications declined 6.9% this past week and have fallen in four of the past six weekly surveys, as supply constraints have pushed home-price growth to record levels.

Thursday 7/8
$Levi Strauss & Co. (LEVI.US)$reports fiscal second-quarter earnings.

$Costco (COST.US)$reports sales data for June.

$Stellantis NV (STLA.US)$the automobile manufacturer formed earlier this year via the merger of Fiat Chrysler Automobiles and Peugeot, hosts EV Day 2021. The company’s chief executive officer, Carlos Tavares, will discuss Stellantis’ electrification strategy going forward.

The Federal Reserve reports consumer credit data for May. Total outstanding consumer credit was a record $4.24 trillion in April, as the continued reopening of the economy and hot housing market spurred shoppers to take on more debt.

The Department of Labor reports initial jobless claims for the week ending on July 3. Claims averaged 392,750 a week in June, the lowest since February of last year.

Friday 7/9
Italy hosts a G20 summit of finance ministers and central bank governors. The confab runs from July 9 to July 10 in Venice. U.S. Treasury Secretary Janet Yellen will attend, as the Biden administration pushes for a global minimum corporate tax rate of at least 15%. This past week, 130 countries, representing more than 90% of global GDP, backed the minimum tax rate after two days of negotiations in Paris.
Source: Bloomberg, CNBC, WSJ

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