S&P futures are this morning higher (with a slight bull trend), up 15 to 16 points this morning for several reasons. First, Domestic new covid-19 infections held below the July 17 peak for the last 8 days; Second, Treasury Secretary Steven Mnuchin said the GOP coronavirus-related stimulus proposal would provide 70% wage replacement for individuals(means more consumer spending and White House economic adviser Larry Kudlow said the measure would include another round of stimulus checks and stay on evictions extension. Lastly, but also very critical, Speaker of the House Nancy Pelosi (D-CA) suggested Democrats would enter stimulus negotiations to keep the country going.
BEAR MARKET WATCH – It’s been an enormous week for corporate earnings. We are about to find out how bad the coronavirus – linked to economic gridlock in the United States and the global financial crisis – is for corporate America.
This could be the worst quarterly decline we will ever see and the worst in the stock market history. Unfortunately, we will have to wait and see. How the market reacts.
BULLISH – However, It could be a situation where “bad news” could be good news because it means the Federal Reserve will continue pumping up the market and also force Congress to do something.
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|S&P 500 CONSUMER DISCRETIONARY||Strong Buy||1127.06|
|S&P 500 CONSUMER STAPLES||Strong Buy||635.97|
|S&P 500 HEALTH CARE||Strong Buy||1222.04|
|S&P 500 INDUSTRIALS||Strong Buy||605.1|
|S&P 500 INFORMATION TECHNOLOGY||Buy||1861.21|
|S&P 500 MATERIALS||Strong Buy||388.23|
|S&P 500 REAL ESTATE||Strong Sell||215.11|
|S&P 500 COMMUNICATION SERVICES||Strong Buy||188.77|
|S&P 500 UTILITIES||Strong Buy||305.14|
|S&P 500 FINANCIALS||Buy||399.24|
|S&P 500 ENERGY||Sell||282.78|
The earnings season is an important part of the process of finding market direction, with earnings season in the first half of this year and the second half of 2020. Investors will then learn how well a company performs in terms of earnings, financial performance, and business model. When expectations are high, this usually means that the hurdle is high, and it is often a good sign for the stock market.
Members of the Federal Reserve Board of Governors, including Federal Deposit Insurance Corporation Chairman James Bullard and Federal Open Market Committee Chairman Ben Bernanke, predict further declines in the stock market in 2020 and beyond.
In the first quarter, analysts were unsure of what to expect, and they expected a slight increase in earnings per share, but not much more.
There is no doubt that there has ever been a favorable moment to reset expectations and this one. After the recent stock market crash and the subsequent share price plunge, the rug was pulled out from under the carpet.
Countries everywhere have reopened their economies, not only in the United States, Europe, and Japan, but also in China, India, Brazil, and other countries.
Progress has been made on the front line of vaccine therapy/trials, developing a new vaccine against coronavirus. As the US government’s new vaccine and treatment program advance, the uncertain prospects we have faced before are becoming increasingly certain.
Once the outlook stabilizes, companies can focus more on selling goods and making money than on the stock market.
According to the latest data, analysts are raising their estimates for earnings and dividends as earnings potential improves.