The Week Ahead on Wall Street

Another Week of Arresting Economic Data Points

Although markets have been bubbling upwards since all time lows in March, optimism was tempered last week with two headline-grabbing economic data reports. Last Wednesday, retail sales figures in the US painted a stark picture of the impact the coronavirus is wreaking on businesses around the country. Their inability to generate sales is more or less directly related to their inability to pay employees. This cause and effect sequence was contextualized on Thursday with the fourth installment of a historic jobless claims report. Over the past month, nearly 22 million people have filed for unemployment benefits. Here’s what investors will have their eyes on in the week ahead:

The Chicago Fed national activity index for March is released today. The gauge was positive in February, but will likely show a drop last month representing a contraction as the gravity of coronavirus set in.

Tomorrow existing home sales for March will outline how drastically the residential real estate market was impacted by the outbreak. For context, according to the National Association of Realtors, existing-home sales rose 6.5% in February, increasing to a 13-year high.

A mortgage applications metric and housing price index are released today. Both will provide additional color to Tuesday’s existing home sales report. The mortgage industry is currently in an interesting position. Close to three million borrowers have leveraged the mortgage forbearance program, which was created to provide relief for homeowners who hold government-backed loans.

EIA Crude Oil Inventories are also released. Remember, oil is hovering near historic lows because of an oversupply of crude in the global markets. This metric will help fill in some blanks for oil traders.

Flash reports for manufacturing and services PMI are released today. New home sales for March are also due. While these all will be closely watched, the banner report will be the jobless claims report again. Last week another 5.2 million Americans filed for unemployment benefits. Investors will be watching for when this number begins to show signs of slowing.

Durable goods orders, core capital goods orders, and the consumer sentiment index are the reports that round out the week. The first two are for March and will highlight international trade trends. The third is for April and will give an indication of how Americans are feeling about their finances.

Five Earnings to Keep an Eye On

Earnings season kicked off last week with major US banks leading the charge. Investors are preparing for another busy week of corporate report cards. Roughly one-fifth of S&P 500 companies are broadcasting their results. Wall Street analysts are expecting profits to drop by nearly 13%.

IBM (IBM) reports after the bell today. The multinational technology company may benefit from increased adoption of cloud computing and artificial intelligence solutions. Remember, last July IBM acquired Red Hat, an open-source, enterprise software maker. Red Hat was thought to be a win for IBM’s cloud division and in the final quarter of 2019, 21 customers signed deals worth more than $10 million with Red Hat. Investors will be keen to see if that trend continued in 1Q 2020.

All eyes are on Netflix (NFLX) tomorrow, which reports after markets close. The stay-at-home stock has done well over the past month as Americans turn to streaming services during their quarantines.

Delta (DAL) is on deck Wednesday. Airlines of all stripes have been battered by the coronavirus pandemic as citizens around the world have shunned travel. How bad will COVID-19’s grip on the global economy impact Delta’s Q1 earnings, and what does that mean for shareholders of other airline companies? That’s what investors will be eyeing today.

T-Mobile (TMUS) reports results on Thursday. Remember, the T-Mobile-Sprint merger closed earlier this month. As part of the agreement T-Mobile also handed over its prepaid business, Boost, to Dish Network. There were a lot of moving parts to make this merger work. Investors will be looking for clarity on how this synergy is going so far and what’s in store for the emboldened carrier.

Verizon (VZ) Communications is a name to watch on Friday. The telecommunications company just shelled out roughly $400 million for video conferencing company BlueJeans. Wireless and remote technology has become integral to the global economy and Verizon is at the forefront of this industry in America.

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