Financial Associated Press (Shanghai Editor Liu Rui), this week, U.S. stocks ushered in the most critical week of the summer: Apple and Amazon and other technology giants will announce financial reports, the US government will announce second-quarter GDP data, and the Federal Reserve will announce July interest rates The resolution, the U.S. Republican Party will reveal a new round of rescue plans, while the four major technology giants will participate in antitrust hearings to accept congressional questions.
A number of blockbuster events have appeared in turn, which are expected to have multiple impacts on the U.S. stock market and will determine the market’s expectations for the recovery of the U.S. economy. This may play a vital role in the direction of U.S. stocks in the future.
Apple and other tech giants will release financial reports
Many technology giants, including Apple and Amazon, are expected to announce financial reports this week. The market will focus on whether their financial data is sufficient to support their current high valuations in the stock market.
Technology stocks currently dominate the S&P 500 constituent stocks and have also played a leading role in the strong rebound of U.S. stocks since March this year.
Facebook will announce its results after the US stock market on Wednesday, while Amazon, Apple and Google’s parent company Alphabet will announce its second quarterly report after the market on Thursday.
According to the company’s performance that has already released performance and expectations, data analysis company Refinitiv predicts that the second quarter earnings of S&P 500 index constituent companies are expected to fall by 40.3%. The profit of technology stocks is expected to fall the least, averaging only 4.4%.
“In general, the financial report numbers look very good. The most basic problem of the stock market is still overvaluation.” QMA chief strategist Ed Keon said, “Measured by the price-to-book ratio, the current US stocks seem to be undervalued. The earnings of the stocks of China may have been hit. Taking certain retail companies or airline companies as examples, it’s hard not to worry about when their business will resume.”
Among the companies that have released financial report data, nearly 80% of the financial report data are better than Wall Street expectations, which is much higher than the average ratio since 1994 (65%).
The Republican Party will announce a new round of rescue plan
At the same time, the Republican Party has finalized the next round of rescue plans worth about 1 trillion U.S. dollars, which are planned to be launched on Monday, Eastern Time. The most concerned method is to replace unemployment assistance benefits-to approximately 30 million unemployed in the United States. The unemployment allowance of $600 per week will expire on July 31.
“Peter Boockvar, chief investment officer of Bleakley Advisory Group, pointed out that now everyone is clearly aware of the extent to which the economy depends on the government’s fiscal and monetary stimulus. Everyone is paying attention. What plan will the government use to replace the $600/week unemployment allowance plan that is about to expire? This will be the most important part of the next stimulus policy.
U.S. Treasury Secretary Mnuchin said on Sunday (July 26) Eastern time that the new rescue bill will amend the federal unemployment benefit clause and replace the original $600 per week with 70% of the salary.
But the bill has not yet been approved by Congress. It is reported that Democrats believe that under the Republican Party’s proposal, it will be very difficult to calculate the amount of subsidy for each person. $600 a week is easier to operate.
Foreign media predict that the bill is expected to be difficult to pass in Congress before the $600/week unemployment benefit plan expires at the end of this month.
Fed will announce interest rate resolution
The Federal Reserve will also hold a meeting this week to discuss the direction of the next monetary policy. It is expected to announce the interest rate resolution early on Thursday morning, Beijing time. The market is expected to stand still, but it is expected to imply that it will introduce more unconventional policies to stimulate the economy. Will hint when it will withdraw from easing. If the Fed’s rhetoric is biased, it may exacerbate the dollar’s decline and further boost gold.
As of press time, spot gold has set a record high, climbing to 1921 US dollars per ounce.
The United States will release the second quarter GDP data
On Thursday, Eastern Time, the US government will announce the economic indicator that investors are most concerned about-US GDP data for the second quarter. This data will help investors determine the specific impact of the economic shutdown on the US economy.
Currently, economists expect the economy to contract by about 35% in the second quarter, and then rebound in the third quarter. But the actual extent of the rebound may depend on the strength of Congress to stimulate the economy and the extent to which the coronavirus will continue to damage businesses and economic activity.
Many tech giants will testify in Congress
In addition, this Wednesday, leaders of many US technology giants will testify before the House Antitrust Committee, including Amazon CEO Jeff Bezos, Apple CEO Tim Cook, and Google parent company Alphabet CEO Pichai. (Sundar Pichai) and Facebook CEO Mark Zuckerberg.