Stocks: Stimulus talks have stalled. But the pressure to act is increasing

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A version of this story first appeared in CNN Business’s Before the Bell newsletter. Not a subscriber? You can register here.

What’s happening: The surge in initial jobless claims over the past two weeks has been signaled as a warning sign as the health crisis worsens in a number of states, demanding further restrictions of movement.

“With viral fears increasing, job losses and income squeezing, we think the recovery could be a lot more bumpy than the markets apparently do, and we think we’re going to experience some disappointment over the course. the next two months, ”James Knightley, chief international economist at ING, said in a recent note to clients.

Economists polled by Refinitiv predict that the U.S. economy created nearly 1.4 million jobs last month. These gains, while solid, would mark a decline from June’s 4.8 million increase.

Signs of economic weakness should push Congress to agree on its next stimulus package. This week is the critical time before lawmakers’ summer recess.

A key benefit – an extra $ 600 a week in aid for unemployed Americans – expired last week. The renewal or reduction of benefits remains a major point of contention.

Hurry up. Without interim measures, Americans could see their incomes drop by $ 18 billion per week, according to Bank of America economists Michelle Meyer and Stephen Juneau. This would weigh on spending that feeds about two-thirds of the US economy.

Meyer and Juneau believe lawmakers can strike a deal earlier this month. They expect the price to exceed the $ 1.1 trillion bill introduced by Senate Republicans, but well below the $ 3.4 trillion approved by House Democrats.

Do not neglect these performers

The uncontrollable profits of America’s biggest tech companies are seriously drying up investors’ attention. But Amazon, Apple and Facebook aren’t the only companies showing strong results during a pandemic.

Here are a few small winners you may have missed:

  • Procter & Gamble (PG): People scrub their homes and wash their dishes more often. It’s a win for a company that owns brands like Tide laundry detergent and Dawn dish soap; sales increased 5% to $ 17.7 billion between April and June compared to a year ago. P&G stock is up 5% this year.
  • Miracle-Gro de Scott (SMG): Shares of the lawn care company have jumped 49% this year, with sales rising 28% in the last quarter as more people try their green thumbs. Scott’s Miracle-Gro raised its forecast for a full year, citing “a year of unprecedented success.”
  • Kellogg Company (K): Demand for cereals and frozen foods helped Kellogg increase sales by 9% in the last quarter, excluding the impact of currency exchange rates and lines of business sold last year. Kellogg has also raised its forecast for the full year. Shares have been stable since the start of the year.

Following: Nintendo (NTDOF) stood out in the last quarter thanks to the success of its game “Animal Crossing: New Horizons”. The company is due to release its latest results this week.

following

Monday: Manufacturing data in China; Clorox (CLX) and Tyson Foods (TSN) gains

Mardi: BP (BP), Cinemark (CNK), Activision Blizzard (Mountain biking), Disney (DIS) and Wynn Resorts (WYNN) gains

Wednesday: ADP employment report; CVS (CVS), Modern (RNAm), New York Times (NOW), Office Depot (TEAR), Hostess marks (TWNK) and Square (SQ) gains

Thursday: Bank of England Interest Rate Decision; Reserve Bank of India Interest Rate Decision; the first claims for unemployment in the United States; ISM non-manufacturing index; Nintendo (NTDOF), Hilton (LDS), Papa Johns (PZZA), ViacomCBS (plus), Vista Outdoor (VSTO), Uber (UBER), Japper (Japp) and Zillow (WITH) gains

Friday: US Jobs Report

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