The Week Ahead on Wall Street

Economic Data

A pair of manufacturing figures are published this morning. Markit manufacturing PMI and the ISM Manufacturing Index for July are released. In June, the ISM Manufacturing Index clocked in at 52.6. Anything over 50 represents expansion. That being said, there are fears that increasing coronavirus cases across the country last month may have slowed any budding momentum in the manufacturing space as certain cities and states paused or rolled back their reopening plans. June construction spending and July motor vehicle sales are also due.

June factory orders are released tomorrow. The figures paint a picture of the overall direction of the economy by providing more detailed information on purchases of durable and non-durable goods. That said, the information may be slightly stale given the fact many states paused reopening plans in July. Nevertheless, the data helps investors contextualize the path and ramifications of the virus on businesses across the country.

On Wednesday, investors will be focused on the ADP employment report for July. In June, private payrolls rose by 2.37 million, which missed estimates of 2.5 million. Businesses were beginning to bring workers back in May and June so Wall Street will be watching to see if this continued in July. June’s trade deficit and July’s services PMI and ISM non manufacturing index are also published.

All eyes will be on the weekly initial jobless claims report on Thursday. This previously mundane statistic has become a must-watch as a result of the ongoing pandemic. After trending downward from its peak in March, the past two readings have shown consecutive upticks. This suggests the nascent economic recovery in May and June might be stalling as a result of increasing coronavirus cases. A third straight week of increases will likely lead to negative sentiment on Wall Street.

The week wraps up with July’s nonfarm payroll report along with statistics highlighting the unemployment rate and average hourly earnings. Nonfarm payrolls rose by 4.8 million in June, smashing expectations of a 2.9 million increase. June’s unemployment rate fell to 11.1%, which was also better than the 12.4% estimate. Investors will be watching to see if this downward trend continued in July.

Earnings to Keep an Eye On

Clorox Co (CLX) is scheduled to report before the bell today. As Axios points out , “Americans really love Clorox right now.” In a new Axios/Harris poll, Clorox was number one in their products and service category, number one in their ethics category, and number two in their trust category. It’s been a volatile stretch for various businesses due to the pandemic, but there have also been a handful of winners. Clorox looks to be one of them. Berkshire Hathaway Inc (BRK), Tyson Foods Inc (TSN), and Peloton Interactive Inc (PTON) are all scheduled to report.

Walt Disney Co (DIS) is scheduled to report after hours tomorrow. In general, analysts are expecting lower revenue on an annual basis due to closures of the company’s theme parks and cancelations of its cruises. Live sports being canceled likely means that its ESPN business was impacted. The one bright spot has been the entertainment company’s streaming service, Disney+, which gained users during lockdowns. The streaming service debuted in Japan over the prior quarter, which should help with customer acquisition. As of May 4, Disney+ had reached 54.5 million subscribers. Wall Street will be watching to see how much this number jumped over the past three months. Sony Corp (SNE), Activision Blizzard Inc (ATVI), and Monster Beverage Corp (MNST) are also scheduled to report.

Moderna Inc (MRNA) is up on Wednesday. The company is one of the front runners in the race to develop a vaccine for COVID-19. Last week, Moderna began phase 3 trials for its candidate, and 30,000 volunteers at nearly 100 research sites are participating in the trial. If the vaccine is successfully developed, the next hurdle will be distribution. Investors will be looking for context on this and more during the biotech company’s earnings call this week. CVS Health Corp (CVS), Square Inc (SQ), and Wayfair Inc (W) are also scheduled to report.

Uber Technologies Inc (UBER) reports after markets close on Thursday. The ride-share giant has faced headwinds in its transportation division as a result of the ongoing pandemic, but has likely seen an uptick in orders on UberEats. Speaking of which, the company recently acquired Postmates, so investors will be looking for more color on future plans for integration and service synergies. Bristol-Myers Squibb Co (BMY), Becton Dickinson and Co (BDX), and Wix.Com Ltd (WIX) are also scheduled to report.

Colony Capital Inc (CLNY) reports on Friday. The real estate and investment management company has holdings in the hospitality property sector which has been struggling as a result of the ongoing pandemic. However, Colony’s diversified portfolio also has exposure to the healthcare space, which has been essential during the outbreak. Investors will be curious to see how certain Colony segments are performing amid this uncertain time for the real estate industry.

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