EARNINGS season may be only half over, but the focus on profits should subside this week as investors turn their attention to the coming presidential election and Friday’s jobs data – the last major economic indicator before the 6 November contest.
More bellwether companies are set to report results in what will be another “peak week” of the earnings season. Such a flurry of numbers normally holds Wall Street’s attention, and it can lead to market swings. But volume and volatility may be slight this week, with market participants opting to remain on the sidelines ahead of jobs data and the election.
The US government’s October jobs report will give a snapshot of the current labour market. It could also give a bit of a lift to President Barack Obama, should it come out better than anticipated, or help Republican candidate Mitt Romney – if it is worse than forecast.
The Standard & Poor’s 500 Index fell 1.5 per cent last week, largely because of a spate of earnings disappointments. The Dow Jones industrial average slid 1.8 per cent last week, and the Nasdaq composite index dropped 0.6 per cent.
While the market at large may be waiting on news events, individual stocks could still be volatile as earnings season grinds along. More than half of the S&P 500 components have reported results so far. This week, though, will bring reports from some marquee names such as Dow components Chevron and Pfizer, as well as S&P 500 stalwarts Visa, Ford Motor and Starbucks.