Amazon Prime Day & Yellen Testimony Weighing on U.S. Stocks
After last week’s holiday-shortened trading week, stocks started off Monday on a mostly positive note with both the S&P 500 index and the tech-heavy Nasdaq trading up and the Dow Jones Industrial Average in negative territory.
Investors will be keeping a close eye on Amazon Prime Day, a “holiday” the ecommerce giant invented a few years ago to gin up more interest from consumers in its site. This year’s festivities kick off Monday at 9 p.m. and the Seattle-based company has promised the most deals ever. Amazon’s rivals including Google and Walmart are going to offer their own deals to steal Amazon’s thunder on its biggest sales day of the year.
This week also is the start of the third quarter earnings season. According to data from FactSet cited by , corporate profits are expected to rise rise 6.6 percent in the quarter, lead by gains in the energy sector. Sales are expected to grow 4.9 percent on a year-over-year basis. Several leading banks including JPMorgan, Citigroup, and PNC are due to report Friday. Other Fortune 500 companies including General Electric are set to issue results later this month.
Federal Reserve Chair Janet Yellen also is scheduled to give her semi-annual monetary policy report to the U.S. Congress this week. Though this sounds deadly dull, many on Wall Street are going to be listening to Yellen’s remarks to see if the central bank will stick to its earlier forecast of a gradual increase in interest rates, which have been near zero since the Great Recession.
Investors were heartened by last week’s strong jobs report though the continued lackluster jobs growth continues to be a concern.
ING Chief Economist James Knightley told the newspapers that Yellen ‘’may well seek to narrow the gap between the Fed’s assessment on the policy outlook and what the market is currently anticipating.”
If that happens, expect stocks to react accordingly.