A Note from Cokie — While the Dow Jones futures are trading higher this week, investors are still bracing for the earnings report. This report could signal the bottom for the US stocks as the country continues to re-open. Shutdowns together with a second wave of COVID-19 have placed constrains on this process.

The truth is this: with every new day we are gaining a better understanding of the virus. This eases some of the tensions on Wall Street. Plus, we are closer to finding a vaccine and Wall Street seems to be acknowledging this with gains. Speculators are likely to bet on the fact that this quarter will mark the worst for the stock earnings and any sell-off in stocks due to their weak earnings could be an opportunity to bag some real bargains!

This Week on Wall Street Stock prices notched solid gains last week, looking past an increase in COVID-19 cases and any potential economic concerns raised by the trend.   The Dow Jones Industrial Average increased by 0.96%, while the Standard & Poor’s 500 climbed 1.76%. The Nasdaq Composite Index bounded 4.01% higher for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, gained just 0.07%.[1][2][3]
Virus Concerns Stocks experienced a volatile week as investors negotiated the crosswinds of encouraging overseas economic data with an accelerating number of COVID-19 cases in several states. Ongoing support of the financial markets by the Federal Reserve appeared to offset any concerns about an economic rebound.  

The big technology companies continued to shine, leading the Nasdaq Composite to multiple new record highs. News of positive trial results for a potential COVID-19 treatment boosted stocks on the final trading day, closing the week on an encouraging note.

On the Record  Regional Federal Reserve presidents had several speaking engagements last week, and the message was a consistent one: expect the economic recovery to remain bumpy. Cleveland Fed President Loretta Mester said that the economy in her region is slowing due to rising COVID-19 cases. She linked gains in combating the virus with further economic progress. She also echoed earlier comments by Fed Chairman Powell that more fiscal support is necessary.[4]  

Meanwhile, San Francisco Fed President Mary Daly observed that it was unlikely many companies would be rehiring all their employees. Thomas Barkin, president of Richmond Federal Reserve, reiterated the challenges of a labor recovery, but also spoke of the strain on local and state governments.[5][6]  

Tuesday: Consumer Price Index (CPI). 
Thursday: Jobless Claims. Retail Sales. 
Friday: Housing Starts.  

Source: Econoday, July 10, 2020 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.  

Monday: PepsiCo, Inc. (PEP).
Tuesday: JPMorgan Chase & Co. (JPM), Citigroup (C), Wells Fargo (WFC). Wednesday: International Business Machines (IBM), Goldman Sachs (GS), eBay, Inc. (EBAY).
Thursday: Microsoft (MSFT), Netflix (NFLX), Bank of America (BAC), Johnson & Johnson (JNJ), UnitedHealth Group (UNH), Abbott Laboratories (ABT), Morgan Stanley (MS), Honeywell International (HON).
Friday: Blackrock, Inc. (BLK).   Source: Zacks, July 10, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

[1] The Wall Street Journal, July 10, 2020

[2] The Wall Street Journal, July 10, 2020

[3] The Wall Street Journal, July 10, 2020

[4] CNBC, July 7, 2020

[5] MarketWatch, July 7, 2020

[6] MarketWatch, July 7, 2020

[7] Brit.co, July 10, 2020 

[8] IRS.gov, May 27, 202