The First Slice for Monday, August 1, 2022

From Caterpillar to Amgen, dozens of large companies report earnings in the coming week, but it may be big economic data, such as Friday’s jobs report, that takes over as a major market catalyst.

Monthly employment reports are always important, but the next few may be even more so. Federal Reserve Chair Jerome Powellmade it clear at his press briefing Wednesday that the Fed’s September rate decision will depend on economic data.

Stocks rallied in the past week, helped by better-than-expected earnings reports and a view that the Federal Reserve may not be as aggressive as it forecast when it comes to interest rate hikes.

The major stock market indexes ended July with their best monthly performance of the year, and the S&P 500 and Dowscored their best months since November 2020. The Nasdaq’s 12.3% gain was its best monthly performance since April 2020.

The S&P was up 4.3% for the week and 9.1% for the month of July. It is still down 13.3% for the year. The Nasdaq was up 4.7% for the week. The Dow was up nearly 3% for the week and 6.7% for the month.

Some of the biggest names in tech delivered earnings beats in the past week, and their stocks were higher, such as AppleMicrosoft and Amazon. There have also been some big misses and negative forecasts, like from Meta Platforms and Intel. Intel was down 8.6% Friday after its earnings miss and lowered forecast.

n the week ahead, there are 148 S&P 500 companies reporting earnings. Reports come from a diverse group of companies, such as health-care names Eli Lilly, Gilead Sciences and Amgen. There will also be reports from travel-related companies, such as Uber and Booking Holdings.

Stocks enter August riding the optimism of July, but since 1995, the S&P 500 has declined by an average 0.5% in the month, according to CFRA. August has also been the third most volatile month, and only three major S&P sectors over that time had averaged gains for the month: real estate, technology and utilities.

Tech’s outperformance during the month does help the Nasdaq, and the Nasdaq 100 increased an average 0.9% in August, going back to 1995, according to CFRA.

Investors have been worried about the prospect that the Federal Reserve’s tightening could push the economy into a recession.

However, Thursday’s report that second-quarter gross domestic product declined by 0.9% was taken in stride, in part because the market has been betting the Fed will have to slow down its hiking. The economy has now contracted two quarters in a row, and it is considered to be in what some economists say is a “technical recession.” But most say it is not yet a real recession because of labor market strength and other factors.

Week ahead calendar

Earnings: Activision Blizzard, Devon Energy, Zoom Info, Rambus, Vornado, Genworth Financial, Avis Budget, Aflac, CF Industries, Mosaic, Simon Property Group, Check Point Software, Loews, Jacobs Engineering, Lattice Semiconductor, Sanmina, DaVita

9:45 a.m. S&P Global manufacturing PMI
10:00 a.m. ISM manufacturing
10:00 a.m. Construction spending

Earnings: Caterpillar, BP, Dupont, Gilead Sciences, Uber,JetBlue, Marathon Petroleum, KKR, Molson Coors Brewing, Eaton, Oatly, S&P Global, Illinois Tool Works, Cummins, Expeditors, Ferrari, Caesars Entertainment, Starbucks, Airbnb, Advanced Micro Devices, PayPal, Owens-Illinois, Assurant, Occidental Petroleum, Chesapeake Energy, Owens-Illinois, Coterra Energy, KKR, Marriott

Vehicle sales

10:00 a.m. Chicago Fed President Charles Evans speaks
10:00 a.m. Housing vacancies
10:00 a.m. JOLTS
6:45 p.m. St. Louis Fed President James Bullard speaks

Earnings: Booking Holdings, eBay, CVS HealthModerna,Dana, Scotts Miracle-Gro, Regeneron, Under Armour, Exelon, Yum Brands, Robinhood, Clorox, MGM Resorts, Allstate,Marathon Oil, Ethan Allen, Brink’s, Sprouts Farmers Market, GoDaddy, Tupperware, New York Times, Lucid Group, Hostess Brands, iRobot, Valvoline, APA, Iamgold, Host Hotels, Copa Holdings, Nabors Industries, Kyndryl, Rent-A-Center

9:45 a.m. S&P Global services PMI
10:00 a.m. ISM Services
10:00 a.m. Factory orders

EarningsEli Lilly, Amgen, Alibaba, Cigna, Air Products, Kellogg, Dropbox, Expedia, Ball Corp., Becton Dickinson, Edgewell Personal Care, Iron Mountain, Restaurant Brands,SeaWorld, Thomson Reuters, Gannett, ConocoPhillips,Intercontinental Exchange, Paramount Global, Shake Shack, Block, DoorDash, TripAdvisor, Lyft, Cushman and Wakefield, Nu Skin, Rocket Companies, Virgin Galactic, WW International, Zillow, Datadog, Zoetis, Duke Energy, Wayfair, Motorola Solutions, Twilio, Synaptics, AMC Entertainment, Skyworks Solutions, XPO Logistics, Suncor Energy, Carvana, Beyond Meat, Johnson Controls, Crocs

8:30 a.m. Initial jobless claims
8:30 a.m. International trade
12:00 p.m. Cleveland Fed President Loretta Mester speaks

Earnings: Allianz, WPP, Canopy Growth, Cinemark, AMC Networks, DraftKings, Fluor, Western Digital, Liberty Broadband, Fluor, Gogo

8:30 a.m. Employment report
3:00 p.m. Consumer credit report

Earnings: Berkshire Hathaway

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