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Day Ahead: 3 Things to Watch for July 23

Stock MarketsJul 22, 2020 04:10PM ET
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© Reuters.

By Liz Moyer

Investing.com -- Tensions between the United States and China kept added a more sober tone to Wednesday's trading session, with the Dow rising modestly.

On Tuesday, the U.S. ordered the Chinese consulate in Houston closed, citing national security concerns and prompting retaliation as China said it was considering shuttering the U.S. consulate in Wuhan.

GOP leaders in the Senate on Wednesday were considering extending pandemic unemployment assistance to December at a reduced $400 a week. Politicians have argued against the payments, which are in addition to unemployment for many, as a disincentive to return to work.

A spate of earnings due after the close on Wednesday and before the open on Thursday include Microsoft Corporation (NASDAQ:MSFT), Tesla Inc (NASDAQ:TSLA)and Twitter Inc (NYSE:TWTR). Thursday features the weekly new unemployment claim numbers.

Here are some things that could affect the market tomorrow:

1. Will Tesla continue to rally?

Tesla shares closed up 1.5% on Wednesday, and rose 6% in after-hours trading, but will they continue their remarkable rise? 

The company reported its fourth consecutive quarterly profit on Wednesday after the closing bell. Analysts tracked by Investing.com had expected a loss of 19 cents a share on revenue of $5 billion.

Shares of the electric car maker have been on an incredible rally, climbing 280% this year.  Short-sellers, who would profit from a decline in the stock, have been circling overhead convinced Tesla is ready for a correction. But now that it has notched its cumulative four quarter profit, it is eligible to join the S&P 500index, an event that tends to boost stocks.

2. Airline earnings highlight travel woes

Southwest Airlines Company (NYSE:LUV) shares fell slightly on Wednesday ahead of earnings in the morning. Analysts have been revising their forecasts amid the overall grim outlook for the airline sector.

Covid-related shutdowns have limited travel, and airlines don't expect that to normalize for several more months. Earlier this week, United Airlines Holdings Inc (NASDAQ:UAL) reported a $1.62 billion loss attributed to the slowdown in air travel because of the coronavirus.

The U.S. Global Jets ETF (NYSE:JETS) is down 48.7% this year.

Analysts tracked by Investing.com expect Southwest to report a loss of $2.61 a share on revenue of $920 million.

3. Jobs numbers come out as Senate considers extending unemployment assistance.

Initial unemployment claims for last week and continuing claims will be reported at 8:30AM ET (1230 GMT). The trend has been weekly improvement since the worst of the pandemic produced job losses in March, but tens of millions of Americans are still out of work, with unemployment at a post-World War II high.

On Wednesday, Bloomberg reported that the administration and certain GOP Senators were considering an extension to the extra pandemic unemployment benefits they instituted in March to help support the economy amid widespread joblessness.

The timing is crucial because the $600 weekly payments, which often come on top of regular unemployment checks, are due to expire next week. Congress is working to push out another stimulus plan, but it was not clear whether it would be able to push a package through by the end of the month.

Day Ahead: 3 Things to Watch for July 23
 

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Comments (10)
Randall Wagner
Randall Wagner Jul 23, 2020 12:13AM ET
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Decouple and bring back manufacturing that the dems gave them free of charge. Only dems reward bad behavior.
John Reighard
John Reighard Jul 22, 2020 11:45PM ET
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shuttering....that's kind of like what the whole world will do if the United States unhooks from China economically.
Kyle Mack
Kyle Mack Jul 22, 2020 7:48PM ET
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see what supe heavily discounted Chinese sales and fictitious memos will get you who said cheaters never win. im rooting for tsla but wow are they cheaters .
Tom Pym
Tom Pym Jul 22, 2020 7:48PM ET
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lol, GM and Ford offer $8000 rebates and no one bats an eye.  Tesla reduces prices by $3000 and everyone screams demand issues.  The cognitive dissonance is astounding.
Jeff Carroll
Jeff Carroll Jul 22, 2020 7:28PM ET
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alot of us are stuck at home with kids who can't go anywhere until this virus is under control. So yes that extra 600 was a life saver ! I also agree it will keep people sitten at home....but isn't that what we need to do to stop the spread ???
Fausto Chavez
Fausto Chavez Jul 22, 2020 7:28PM ET
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they act like employers are struggling to find workers. my phone isn't ringing with offers.
mohammad qaddomi
qaddomi Jul 22, 2020 6:41PM ET
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acor $$
Armando Rod
Not_Robinhood Jul 22, 2020 6:40PM ET
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Extending the weekly unemployment benefits is a mistake. The lazy gets worse. The manufacturing sector is begging for workforce and they don't want to come back because they make more money at home. #govermentfail
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Evgeny Zakharov
Evgeny Zakharov Jul 22, 2020 6:40PM ET
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And what about those who made more than that and now (even with this extra) still can’tmpay rent, buy insurance and have something to live on? These money willreturn to the economy, but should be paid wisely, not the same amount to everybody
Hol volt Hol nem volt
Hol volt Hol nem volt Jul 22, 2020 6:40PM ET
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that's a lie .
Evgeny Zakharov
Evgeny Zakharov Jul 22, 2020 6:40PM ET
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Whoever says it’s a mistake - usually perfectly employed making several times more than that unemployment drops
Carlton Hall
Carlton Hall Jul 22, 2020 6:40PM ET
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I stay home so i wont get sick infect family and others and don’t die or ****someone! Sad you prefer money over family and life! 140000 dead in US more to come!!
Jack Drummond
Jack Drummond Jul 22, 2020 6:40PM ET
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I hope you land in long-term unemployment. Write something authoritative then.
Justin Justice
Justin Justice Jul 22, 2020 6:38PM ET
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so long call on tesla?
Nkosinathi Mngomezulu
Nkosinathi Mngomezulu Jul 22, 2020 6:38PM ET
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What do you mean?
Sean Tani
Sean Tani Jul 22, 2020 6:38PM ET
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Terrible Idea . Take your short time profit and Run while ppl are still ******
Hector Luis
Hector Luis Jul 22, 2020 6:35PM ET
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Lets get paid
Raza Ali
Raza Ali Jul 22, 2020 6:31PM ET
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Ali
Neeraj Bapat
Neeraj Bapat Jul 22, 2020 5:40PM ET
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this 600 dollar benefit is madness...there are no free lunches...this will come home to roost....oops roast I meant
Evgeny Zakharov
Evgeny Zakharov Jul 22, 2020 5:40PM ET
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You’re probably employed, right?
Evgeny Zakharov
Evgeny Zakharov Jul 22, 2020 5:40PM ET
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also, google about “uncomditional income” - this is the idea of the future, but need pretty thorough think analysis
 
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