Earnings, trade war — What to know in the week ahead

Though earnings season is slowly winding down, a handful of key names are gearing up to report quarterly results this week.

So far, more than 80% of the S&P 500’s market cap reported second-quarter results. “Earnings are beating by 5.7%, with 68% of companies exceeding their bottom-line estimates. This compares to 5.5% and 71% over the past 3 years,” according to Credit Suisse strategist Jonathan Golub.

The biggest names set to report this week include Shake Shack, Marriott, Papa John’s, Disney, Wynn Resorts,CVS, Roku, Lyft, Kraft Heinz and Uber.

Meanwhile, it will be a quieter week on the economic data front. On Monday, the Institute for Supply Management non-manufacturing index reading for the month of July will be released. After dropping to a two-year low in June, economists expect July’s reading to have ticked higher from those June levels.

“We expect that the ISM non-manufacturing index edged back up again in July, but that wouldn’t change the fact that activity growth has still slowed sharply over the past 12 months,” Capital Economics wrote in a note Friday. “The ISM non-manufacturing index dropped to a near-two-year low of 55.1 in June, from 56.9, driven by sharp declines in the new orders, business activity and employment indices. However, the latest regional Fed surveys suggest that activity stabilized in July.”

Economists polled by Bloomberg expect an ISM non-manufacturing index reading of 55.5 for July, up from 55.1 in June.

In addition, the Producer Price Index reading for July will also be a focal point for investors on Friday. PPI data is often looked to as a gauge of U.S. producer prices. Core producer prices are expected to have risen 0.2% from June and 2.4% from last year, according to economists surveyed by Bloomberg.

“Like other inflation measures, growth in the producer price index has slowed this year,” Wells Fargo wrote in a note Friday. “If PPI inflation were to slow further, it would likely reinforce markets’ views that this week’s rate cut by the Fed will not be a one-and-done move. Our forecast is for one more rate cut this year, and for inflation to eventually pick up around the end of the year.”

This week, market participants will be closely watching any trade war developments following last weeks’ announcement by President Trump to slap additional 10% tariffs on the remaining $300 billion worth of Chinese goods. The president’s tweet sent the markets in a frenzy and stocks had their worst week of the year.

The additional tariffs will be enacted on September 1, unless the Chinese and U.S. can come to some sort of agreement before then. Any new developments on the trade feud will be closely monitored.

Earnings calendar

Monday: Avis Budget Group (CAR), Caesars Entertainment (CZR), Marriott (MAR), Shake Shack (SHAK), Take-Two Interactive (TTWO) after market close

Tuesday: Blue Apron (APRN), Discovery, Inc (DISCA), Regeneron (REGN) before market open; Devon Energy (DVN), Hertz (HTZ), Match Group (MTCH), Papa John’s (PZZA), Disney (DIS), Weight Watchers (WW), Wynn Resorts (WYNN) after market close

Wednesday: CVS (CVS), New York Times (NYT), Teva Pharmaceuticals (TEVA), Wendy’s (WEN) before market open; Booking Holdings (BKNG), e.l.f. Beauty (ELF), Fox (FOXA), IAC/InterActive Corp (IAC), Jack in the Box (JACK), Lyft (LYFT), Marathon Oil (MRO), Roku (ROKU), Skyworks (SWKS), Sonos (SONO), TripAdvisor (TRIP), Zillow (ZG) after market close

Thursday: AMC Entertainment (AMC), Cronos Group (CRON), Fiverr (FVRR), Norweigan Cruise Line (NCLH), Kraft Heinz (KHC), Viacom (VIAB) before market open; Activision Blizzard (ATVI), CBS (CBS), Revolve Group (RVLV), Uber (UBER), Yelp (YELP) after market close

Friday: N/A

Economic calendar

Monday: Markit US Services PMI, July (52.2 prior); Markit US Composite PMI, July (51.6 prior); ISM Non-Manufacturing Index, July (55.5 expected, 55.1 prior)

Tuesday: JOLTS Job Openings, June (7323 prior)

Wednesday: MBA Mortgage Applications, week ended Aug 2 (-1.4% prior)

Thursday: Initial Jobless Claims, week ended Aug 3 (215,000 expected, 215,000 prior); Continuing Claims, week ended July 27 (1.699 million prior); Bloomberg Consumer Comfort, week ended Aug 4 (64.7 prior); Wholesale Inventories month-on-month, June (+0.2% expected, +0.2% prior)

Friday: PPI Final Demand month-on-month, July (+0.2% expected, +0.1% prior); PPI excluding Food and Energy month-on-month, July (+0.2% expected, +0.3% prior); PPI Final Demand year-on-year, July (+1.7% expected, +1.7% prior); PPI excluding Food and Energy year-on-year, July (+2.3% expected, +2.3% prior)

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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