Nasdaq and New York Stock Exchange stocks are in the spotlight this week. Both small and large cap companies are set for earnings to be reported during the coming days. Tepid earnings from some large companies and the uncertainty whether Trump will be able to execute his pro-growth policy have softened gains during the first half of the week.
Bank of America’s stock price dropped 0.3 percent, and Goldman Sachs’ dropped 1.2 percent after quarterly earnings report. In the past week, Wells Fargo, JP Morgan, and Citigroup’s share prices fell after their quarterly results and prediction did not make investors happy.
In other news, Harley-Davidson’s stock price dropped 9.6 percent after the company reduced its shipments forecast in 2017.
Eyes On Healthcare
The healthcare sector, on the other hand, will be under inspection since the Republican healthcare bill did not pass in the Senate due to the rejection from two republican senators.
The failure of the healthcare bill created concerns that whether Trump will execute his tax reform and infrastructure rebuild plan. The president has not achieved any accomplishments in legislation for six month. The health care impasse made the U.S dollar reach a record 10-months low against other major currencies.
“Investor sentiment is pessimistic this morning,” said chief market analyst at Think Markets UK Naeem Aslam.
“The fiasco of the healthcare bill means that the tax reforms or the so called infrastructure spending plan are in jeopardy.”
UnitedHealth Group’s share price increased 0.6% after the insurer’s quarterly revenue exceeded expectations and increased its profit forecast.
Johnson and Johnson’s stock price increased 1% after it increased its earnings forecast.
Because the earnings season is on its way, the market focus on corporate results to see if the high valuations are correct in the situation mingled with diverse economic data, mild inflation and policy impasse in Washington. Insiders are anticipating an 8.2 percent increase in the second-quarter revenue of the S&P 500 companies a year ago.
U.S Corporates released their best earnings for the first quarter since 2011, according to Thomson Reuters I/B/E/S. The S&P 500 has been trading at around 18 times earnings estimates for the next year, while the long-term average is 15 times.