McDonald’s, Pfizer, Alphabet, Apple and AMD are among the companies expected to release their latest quarterly figures this week.
As of Friday’s close, 128 companies in the S&P 500 had reported earnings, 81% beating analysts’ expectations, according to Refinitiv. However, the overall profits of the S&P 500 fell more than 40% from the period a year earlier, with the coronavirus pandemic taking a big chunk of corporate profits.
“Stock prices have climbed even as analysts’ consensus earnings estimates plunged,” said Ed Yardeni, chief investment strategist at Yardeni Research. “These estimates have started to show signs of lows in recent weeks. However, any recovery could be slowed or even halted if the number of COVID-19 cases continues to rise and state governors slow or reverse the lifting of lockdown restrictions. ”
Traders also looked to Washington as lawmakers tried to push forward another coronavirus stimulus package.
On Sunday, Treasury Secretary Steven Mnuchin said Republicans had finalized an estimated $ 1 trillion bill in coronavirus relief funds. Mnuchin added that he hopes the proposal can find bipartisan support.
However, Jefferies chief economist Aneta Markowska warned that “there is still a wide gap between the GOP and Democrats, especially when it comes to unemployment benefits and state and local aid. Closing the gap will likely take more than a week, which means a deal is unlikely to be reached until July 31. ”
White House economic adviser Larry Kudlow shed light on some of the measures included in the GOP proposal, noting: “There is a check for $ 1,200 coming up, which will be part of the new package. ”
Wall Street was coming off a losing week as stocks of big tech companies struggled and tensions between the United States and China increased. The Dow and the S&P 500 each managed a streak of three consecutive weeks. The Nasdaq, meanwhile, recorded its first consecutive weekly losses since May.
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