By Chloe
Weekly market recap
For the week, the $Nasdaq Composite Index(.IXIC.US)$ gained 0.48%, the $S&P 500 index(.SPX.US)$ gained 0.61%, and the $Dow Jones Industrial Average(.DJI.US)$ increased 0.66%.
Job report was strong enough to boost confidence
Friday's jobs report showed the unemployment rate dropping to 5.8% from 6.1% and that 559,000 jobs were added in May. The report was seen as strong enough to keep investors' confidence in the economy, but light enough to keep the Federal Reserve from rushing to change its easy-money policies.
May's CPI ahead
Investors are focused on inflation data in the week ahead, with May's Consumer Price Index (CPI) scheduled to be released Thursday. In April the CPI rose 4.2% from the previous year, the fastest increase since 2008. If prices continue to rise it could cause the Federal Reserve to step back from its easy policies.
Tech companies are likely to gain from G7's tax agreement
Over the weekend the G7 nations reached an agreement on global tax reform, calling for the world's largest corporations to pay at least a 15% tax on their earnings. That's lower than the Biden administration's initial suggestion of a minimum 21% tax rate, which didn't garner much enthusiasm in other countries. Major companies including Facebook and Google have responded favorably to the agreement. Also, Apple's Worldwide Developers Conference will kick off on June 7.
Here's a look at the returns of S&P 500 sectors.
Source: Bloomberg
The week ahead in focus
Here are the most anticipated earnings releases, IPOs and economic events for the week ahead.
Companies including Marvell Technology, GameStop and Chewy report results this week.
$GameStop Corp(GME.US)$, the world's largest multichannel video game retailer, is expected to report its Q1 results on June 9. GME has been very volatile as retail investors crowd into meme stocks.
GameStop issued encouraging preliminary sales numbers for the nine weeks ended Apr 3, 2021, wherein total global sales grew 11%. The company has been able to achieve sales growth despite challenges related to the pandemic. Analysts at Zacks expected GME to report a loss of -$0.68 per share, an improvement from a loss of -$1.61 per share seen in the same period a year ago.
$Chewy Inc(CHWY.US)$, the Florida-based online pet store, will report its Q1 earnings on June 10. Analysts expect chewy to post YoY revenue growth of over 30% to $2.12 billion and YoY EPS growth of 125% to $0.03.
We see Chewy as one of the best-positioned Internet SMID-cap names given 1) the staple-like ~$100B US pet products and services industry Chewy addresses and secular pet ownership growth, 2) its leading online position and expected further brick & mortar share losses, and 3) ability to reach profitability due to strong marketing efficiency.
-Lauren Schenk, analyst at Morgan Stanley
Source: Bloomberg, CNBC, WSJ
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