What will drive the markets this week?
Surprisingly weak U.S. employment data released on Friday fueled recession fears, leading investors to sell off stocks and seek refuge in safe-haven bonds. The Nasdaq Composite dropped 417.98 points, or 2.43%, to close at 16,776.16. This decline pushed the index more than 10% below its July closing high, signaling a correction amid concerns over high valuations in a weakening economy. The Dow Jones Industrial Average fell 610.71 points, or 1.51%, to 39,737.26, while the S&P 500 lost 100.12 points.
In Europe, the STOXX 600 fell nearly 3% on Friday, as global equity markets were rattled by the U.S. jobs report, heightening fears of an economic slowdown in the world’s largest economy.
Japan’s benchmark indexes plunged on Friday, with most Asia-Pacific markets down following Wall Street’s sell-off amid recession worries. According to FactSet data, the Nikkei 225 dropped 5.81% to close at 35,909.7, its worst day since March 2020, falling below the 36,000 mark for the first time since January.
Global equities faced significant losses today as Wall Street joined a worldwide stock rout initiated in Japan. The dollar tumbled against the yen, and U.S. Treasury yields dropped amid concerns about a potential recession in the United States.
Oil prices also declined during a volatile session on Monday, driven by recession fears. However, the drop was mitigated by concerns that escalating Middle East conflicts could disrupt crude supplies.
This week, investors will receive new data on the services sector, consumer credit levels, and more.
Pharmaceutical companies may also draw attention with earnings reports from Eli Lilly (LLY), Novo Nordisk (NVO), Amgen (AMGN), and Gilead Sciences (GILD). Other companies scheduled to report include Walt Disney (DIS), Palantir Technologies (PLTR), Caterpillar (CAT), Uber Technologies (UBER), and Airbnb (ABNB).
Events expected to move the markets this week
Monday, Aug. 5
- S&P sector services PMI (July)
- ISM Services (July)
- San Francisco Fed President Mary Daly delivers remarks
- CSX (CSX) and Palantir report earnings
Tuesday, Aug. 6
- U.S. trade deficit (June)
- Amgen, Caterpillar, Uber Technologies, Airbnb, Super Micro Computer (SMCI), Yum! Brands (YUM), and Reddit (RDDT) report earnings
Wednesday, Aug. 7
- Consumer credit (June)
- Novo Nordisk, Walt Disney, Shopify (SHOP), and CVS Health (CVS) report earnings
Thursday, Aug. 8
- Wholesale inventories (June)
- Eli Lilly and Gilead Sciences report earnings
- Richmond Fed President Tom Barkin delivers remarks
Friday, Aug. 9
- Hawaiian Electric (HE) reports earnings