The Week Ahead on Wall Street

Economic Data

Today the Chicago Fed will release its national activity index for November, a measure of overall economic activity in the United States. The index hit 0.83 in October—a jump from 0.32 the month before. That was the first increase in four months after the index declined in July, August, and September.

Tomorrow the Commerce Department will update its GDP estimate for Q3. Initial estimates showed United States GDP ballooning to 33.1% in the third quarter, a sign that the economy is bouncing back. Wall Street reacted positively to early Q3 estimates, as GDP had fallen at a record rate in Q2. Also tomorrow the December consumer confidence index and November existing home sales will be released.

On Wednesday November personal income, core inflation, new home sale, and the December Consumer Sentiment Index will be released. Consumer spending for November will also be published. Consumer spending—or the purchase of cars, furniture, clothing, food, and spending on health care and education—comprises 70% of GDP. In 2019 Americans’ consumer spending totaled $13.28 trillion. In October US consumer spending rose, but economists suggested that growth might slow in the wake of increasing COVID-19 infections.

Thursday will see the release of initial jobless claims, November durable goods orders, and November core capital goods orders. Data released last Thursday showed that jobless claims hit 885,000 during the week ending December 12. This was higher than economists were expecting. It was also the largest jobless claims figure seen since early September.

No economic data is scheduled for release on Friday due to the Christmas Day holiday.

Earnings to Keep An Eye On

Today FactSet Research Systems Inc (FDS) will release its latest results. The financial data company collects data and portfolio analytics for investment firms like Dow Jones. At the end of November S&P Global announced that it will buy IHS Markit for about $44 billion. The deal highlights the consolidation in the financial data and information space. Some analysts think that Factset may also consider purchases or mergers in the months and years ahead to stay competitive.

Carmax Inc (KMX) and Cintas (CTAS) will release earnings tomorrow. Cintas is primarily a uniform rental company, but analysts have noticed that its sanitation and hygiene facility service offerings make up 10% of the company’s total revenue. Cleanliness is in demand as a result of the pandemic, which has helped Cintas. Near its March low Cintas’ stock was trading below $160 per share but since then it has surged to over $350 per share. On the year as a whole, Cintas’ shares have gained over 30%.

Carmax, the biggest used-car retailer in the United States, has been hiring heavily this holiday season. The company was not just looking for temporary workers, but more than 25,000 long-term associates around the country. At a time when hiring has slowed around the US, the hiring trend points to potential growth for Carmax.

On Wednesday Paychex Inc (PAYX) will release earnings. Paychex shares have climbed 20.6% in the last six months, outperforming the rest of the outsourcing market. In an effort to stay nimble, Paychez released a cost-effective retirement plan option for small- and medium-sized businesses under the SECURE Act.

No major earnings will be announced on Thursday or Friday due to the Christmas holiday.

The New Coronavirus Relief Bill

Lawmakers announced on Sunday night that they have reached a deal on a $900 billion coronavirus relief package. Here are highlights on what is included in the new bill:

Unemployment insurance: An extra $300 per week for 11 weeks to federal jobless benefits through March 14, 2021.

Small business loans: $248 billion for a new wave of Paycheck Protection Program (PPP) loans for small businesses. $12 billion of this money is to be distributed to minority-owned businesses, and $15 billion is set to go to live venues and independent movie theaters.

Stimulus checks: $600 checks for individual taxpayers earning under $75,000 per year, and an additional $600 per dependent.

Rent relief: $25 billion in rental relief, which can be used for rent and utility payments in the future or for bills that have not been paid since the beginning of the pandemic. The bill also extends the nationwide eviction moratorium through January 31, 2021.

Food assistance: $13 billion in extra funding for the Supplemental Nutrition Assistance Program (SNAP).

Congress is expected to vote on the bill today.

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