The Week Ahead on Wall Street

Economic Data Points

Some of the biggest stories last week revolved around a historic oil price drop on Monday and the signing of another $484 billion coronavirus relief bill. The week ahead promises to be active as well, especially in regards to economic data points. Here are a few to keep an eye on:

Today the Dallas Fed releases its manufacturing outlook survey for April. The gauge is meant to assess the state’s factory activity, which is important given the size of Texas’ economy. In fact, if Texas were an independent country it would have the 10th-largest economy in the world . Texas will likely be one of the states hit hardest by the oil price decline, so it will be important to note how the Lone Star State is holding up in other areas as well.

Tomorrow the Case-Shiller Home Price Index for February and Consumer Confidence Index for April are released. While the former may be slightly dated, the latter will be a good indication of how Americans are feeling about the economy—especially as it relates to saving and spending. Advance trade in goods for March and the homeownership rate for Q1 are also published.

On Wednesday, Q1 GDP is released. The median forecast is calling for a recording of -3.3%. Pending home sales for March are due and there is an announcement from the FOMC in the afternoon. Given the amount of money the Fed is pumping into the economy, this statement, along with a press conference from Chairman Jerome Powell, will be watched closely by Wall Street.

On Thursday, personal income, consumer spending, and core inflation for March are published. The Chicago PMI for April will also be released, along with the employment cost index for Q1. The most important figures will be the initial jobless claims report. Last week, another 4.4 million Americans filed for unemployment bringing total jobless claims since coronavirus hit to 26 million. This number did show a downward trend, which pushed US stocks higher last Thursday. If the trend continues, investors may look favorably on the report, even though the number of people losing their jobs will still be heartbreaking.

On Friday, construction spending for March is due. Additionally, manufacturing PMI and motor vehicles sales for April are published.

Earnings: Oil and Gas, Technology

As earnings season continues, this week will see reports from big technology companies and oil and gas giants. Here’s what to watch:

Bayer (BAYRY), the German pharmaceutical and chemical giant, is scheduled to report before the bell today. According to Deutsche Bank (DB), Bayer’s pharmaceutical division should have been able to weather the pandemic relatively well so far. One of its top sellers, Xarelto, may post another quarter of double-digit growth. In its crop science division, Bayer is unlikely to provide any eye-opening details on its Roundup litigation.

Alphabet (GOOGL) reports after the bell tomorrow. Keep an eye on advertising demand, non-search revenues, and overall expenses. Last week it was revealed that Google is cutting up to 50% of its marketing budget for the second half of the year. If Google is making these moves, other companies may follow suit. The results from the search engine giant will shed light on coronavirus’ impact on digital advertising. Mastercard (MA), Merck & Co (MRK) and Pfizer (PFE) are also scheduled to report before the bell today.

Wednesday is another day full of earnings that will highlight the pandemic’s impact on the tech sector. Microsoft (MSFT), Facebook (FB), Samsung Electronics Co. (SSNLF) and Tesla (TSLA) are all scheduled to report. Facebook’s results add color to Google’s reports about the state of online advertising. Investors will also have their eye on Tesla (TSLA). Baird analyst Ben Kallo said Friday that the COVID-19-induced recession may help the electric vehicle maker since other competitors’ ambitions have been slowed in the wake of the outbreak.

Apple (AAPL), Amazon (AMZN), Visa (V), Comcast Corp. (CMCSA), and Amgen Inc (AMGN) are all scheduled to report Thursday. Over 60% of Apple’s net sales last quarter were driven by the iPhone, which will likely see sales decline. The company does have a new cash cow in its services segment which includes Apple Music, Podcasts, and Arcade. More and more people are relying on the apps on their phones, but investors will be watching to see if they want new mobile devices. Amazon will also be closely monitored as the e-commerce giant has seen its share price rise as more people turn to online shopping in the wake of the pandemic.

ExxonMobil Corp (XOM) and Chevron (CVX) are scheduled to report on Friday. Shares of the oil giants have been caught in the cross hairs of the price war in early March. They were also impacted by the historic drop on Monday of last week. A major focus will be on dividends. Chevron, for example, has not cut its dividend since 1934, during the Great Depression. CEO Michael Wirth has vowed to avoid cutting Chevron’s dividend in spite of cash concerns related to lower oil prices.

What to Watch Overseas

Investors will also have their eyes on overseas events . This week will be a busy stretch for foreign central banks. Today in Japan, analysts expect policy makers in the country to ditch pre-coronavirus bond-buying targets and instead try to help the country navigate the fallout from the pandemic.

The European Central Bank is scheduled to meet on Thursday and has made decisions that mimic those in the United States. The ECB is expanding its balance sheet and loosening restrictions on the assets it can buy. Keep an eye on words from ECB President Christine Lagarde after the meeting that is being held via conference call.

In China, some of the top banks will report quarterly results. The figures may provide a better picture of how the outbreak impacted the financial sector of the world’s second largest economy.

Lastly, after such a notable week for oil markets, Wall Street will continue to monitor crude prices in the week ahead. Lockdowns are tentatively easing around the world and that may bode well for the sector. That being said, there is still a glut of the commodity and limited storage. Investors will be laser focused on developments in this space heading into the fifth month of the year.

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