Stocks rose Monday and cryptos jumped. The Senate’s 51-50 passing of the Inflation Reduction Act boosted sentiment today.
Meme stocks surged Monday as a WallStreetBets-led short squeeze on Bed, Bath, & Beyond (BBBY) entered its second day. Bed Bath and Beyond increased more than 35% Monday. GameStop (GME) and AMC (AMC) rose 8% and 11% respectively.
This week, investors will watch the Consumer Price Index and Producer Price Index reports on Wednesday and Thursday, respectively. These inflation updates will be highly anticipated following the red-hot jobs report Friday that showed the economy add more than double the number that had been expected.
The Fed aims to slow the economy by raising rates. With the job market once again proving to be stronger than expected, it leaves the door open to the Fed taking more aggressive paths to fight inflation for longer. With the job market surging, raising rates faster could be seen as necessary to prevent added inflationary pressures from wage-based inflation.
A higher than expected inflation reading could underscore worries that the Fed will have to get even more hawkish, while lower readings could steady nerves over the jobs report.
In addition to inflation updates, investors will be watching earnings reports. While earnings are starting to slow, there remain some big reports to be seen.
Inflation Reduction Act
The Inflation Reduction Act passed over the weekend was a big win for some companies and a big loss for others.
Electric carmakers, renewable energy, and oil companies were all winners from the bill as it provides the lot with tax credits.
Meanwhile, tech and pharmaceutical companies are losers in this. Pharma loses as the bill allows Medicare to negotiate drug prices and tech companies lose two major tax increases and a new levy on stock buybacks.
The House is expected to vote on the bill Friday.
Consumer Prices
The Consumer Price Index is expected to have risen by 0.2% in July, following a 1.3% rise in June. The core figure is expected to rise by 0.5% following June’s reading of 0.7%.
Consumer prices are expected to have risen at a slower pace in July. This would mirror slowing price increases in both the services and manufacturing indexes shown last week.
Producer Prices
Producer prices are expected to have risen at a pace of 0.3% in July following June’s reading of 1.1%. The core prices are expected to have remained unchanged at a pace of 0.4%.
Earnings
In earnings, Roblox (RBLX), Disney (DIS), and Coinbase (COIN) are expected to report this week.
Roblox showed growth in users and usage in its previous report but saw bookings fall by 3%. Roblox has failed to beat expectations in both of its previous quarters, so investors in the company will be hoping to see the metaverse company buck the trend.
Shares of Coinbase are nearly double what they were on June 30 when it was trading at $47.02, with COIN currently at $90.08 per share. Coinbase’s loss per share is expected to narrow, with analysts expecting a loss of $1.23 per share.
While there has been a rally in cryptos as of late, analysts are expecting Coinbase to bring in less than half what it did a year ago with revenue expectations set at $868.39 million. Anything under expectation could undermine the stock’s recent, sharp rally.
Disney is set to report earnings this week as well. Investors will be watching the parks segment of the company closely to see if there has been a revival in park attendance. Additionally, Disney+ numbers will be closely monitored to see if the higher margin part of the company is continuing to grow strong.
Economic Events this Week
Tuesday
- 08:30 ET - Productivity-Prel
- 08:30 ET - Unit Labor Costs - Prel
Wednesday
- 08:30 ET - Core CPI
- 08:30 ET - CPI
- 10:30 ET - EIA Crude Oil Inventories
- 14:00 ET - Treasury Budget
Thursday
- 08:30 ET - Core PPI
- 08:30 ET - Initial Claims
- 08:30 ET - PPI
- 10:30 ET - EIA Natural Gas Inventories
Friday
- 10:00 ET - Univ. of Michigan Consumer Sentiment - Prelim
Earnings Reports This Week
Monday:
After the bell:
ITUB, AIG, IFF, OKE, TTWO, PFG, AZPN, ACM, NWS, NWSA, AVLR, SWCH, SWAV, TREX, APLS, FSK, RIOCF, VAC, BWXT, QLYS
Tuesday:
Before the bell:
ARMK, BSY, CLVT, CPRI, EMR, GFS, H, HR, MZDAY, NVEI, OCPNY, OLPX, PLNT, RL, SOMLY, STBFY, SYY, TDG, TPG, WMG
After the bell:
TRVG, ALC, WELL, ZLAB, RBLX, TTD, COIN, AKAM, PLUG, U, XP, DAR, MASI, AXON, DLB, WYNN, CELH, IAC, EXEL, HRB
Wednesday:
Before the bell:
BLDP, BNTGY, CAE, CYBR, EMRAF, FOX, FOXA, GMAB, HAE, HMC, IMCR, IS, LTH, NOMD, RKUNY, SSDOY, TCNNF, VWDRY, WEN, WIX
After the bell:
DIS, MFC, CPNG, FNV, BRFS, APP, BMBL, BROS, CACI, MQ, STN, AVT, PAAS, STAA, TCN, HGTY, LIMAF, SMR, SONO, ENS
Thursday:
Before the bell:
AEG, AER, AIT, AZUL, BAM, BXSL, CAH, CDNAF, CIXX, EQRX, GBTG, GOOS, HBI, KBCSY, NVZMY, ONEXF, PRVA, RWEOY, SGHC, USFD
After the bell:
RMD, ILMN, RIVN, NTCO, WPM, BAP, AQN, RYAN, EDR, TOST, FLO, VET, JOBY, MCW, VIAV, YPF, PAM, PFHC, RKLB, OLO
Friday:
Before the bell:
AIRS, BR, CMMB, NYC, PCT, PLXP, PNT, RGF, SDPI, SNDA, SPB, VERO