Day Ahead: 3 Things to Watch for July 22
By Christiana Sciaudone
Investing.com -- Strong earnings and the EU recovery plan helped drive the market higher on Tuesday.
Coca-Cola (NYSE:KO) reported second-quarter results that beat on the bottom line, and International Business Machines (NYSE:IBM) delivered second-quarter results above Wall Street expectations, underpinned by a contribution from Red Hat.
Talks about a renewed U.S. stimulus plan also helped support the market, including oil prices. Occidental Petroleum (NYSE:OXY), Apache (NASDAQ:APA) and Devon Energy (NYSE:DVN) rose. Financials also gained.
Tech, on the other hand, took a break from seemingly non-stop rallying, with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) lower.
Coronavirus cases in the U.S. topped 3.8 million, with over 140,000 dead, according to Johns Hopkins.
The earnings frenzy continues on Wednesday.
Here are three things that may move markets on July 22:
1. Tesla and others on tap to tell us how they’ve fared amid pandemic madness
All eyes will be on Tesla Inc (NASDAQ:TSLA) when it reports Wednesday after the market close. Microsoft Corporation (NASDAQ:MSFT) Thermo Fisher Scientific Inc (NYSE:TMO) and Chipotle Mexican Grill Inc (NYSE:CMG) will also tell us how their most recently completed quarters fared.
Tesla fell ahead of quarterly earnings. Revenue for the period is expected to total $5 billion with a loss per shares of 19 cents, according to analysts tracked by Investing.com. While the stock has quadrupled in 2020, just seven of 27 analysts have a buy-equivalent rating on the stock. The rest are evenly split between selling and holding.
Microsoft traded lower ahead of earnings. Analysts surveyed by Investing.com expect quarterly revenue of $36 billion and earnings per share of $1.38.
Thermo Fisher Scientific, with a market cap of more than $160 billion, may report sales of $5.9 billion and earnings per share of $2.78. Analysts overwhelmingly recommend buying the stock, with eight recommendations to buy versus one hold and zero sells, according to analysts tracked by Investing.com.
Finally, the Mexican-inspired delight Chipotle reports Wednesday. Revenue for the second quarter is estimated at $1.3 billion, the lowest since the first quarter of 2019. Earnings per share of 19 cents is forecast, the lowest in more than four years. Chipotle has 14 buy ratings, 13 holds and no sells, according to data compiled by Investing.com.
2. New homes have sold like hotcakes. How about used ones?
Sales of previously owned homes in the U.S. probably jumped in June after falling in May to the lowest level since 2010. About 4.12 million units are expected to have sold, versus the total in May of 3.91 million. U.S. home construction starts rose 17% in June, with builders ramping up production as lockdowns eased.
A survey by John Burns Real Estate Consulting showed that new home sales in June jumped 55%, CNBC reported. Homebuilder Taylor Morrison (NYSE:TMHC) also reported earlier this month that June was its best sales month in company history, with a 94% increase in net sales orders year-over-year.
Crude oil inventories are also out in the morning. Oil traded higher Tuesday as analysts forecast that inventories fell again last week, extending the previous week’s draw.
3. Are more checks in store? Depends who you ask
The Dow Jones Industrial Average pulled back slightly after Senate Majority Leader Mitch McConnell said he doesn’t expect the renewed stimulus bill to pass by the end of next week. Treasury Secretary Steven Mnuchin had said the bill would pass before the end of July, Politico reported.
Mnuchin told reporters that the Trump administration is prepared to "spend what we need to spend" in the next coronavirus relief package. The administration is pushing a package worth $1 trillion.
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