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Investing.com — Remote working and learning has been a boon to the tech sector, pushing the broader market to a new high even as the U.S. economy struggles to overcome the damage from pandemic lockdowns.
On Wednesday, it was Salesforce.com Inc (NYSE:CRM) that pushed the market higher after reporting better than expected earnings. More often than not over the last few weeks, gains have been driven by Fab 5 stocks such as Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN).
Speaking of Amazon, CEO and founder Jeff Bezos now has a net worth of $200 billion… that’s with a B. Amazon stock surged 2.9% on Wednesday.
Everyone from stock investors to currency traders awaits comments by Federal Reserve Chairman Jerome Powell on Thursday. He is expected to talk about inflation and the outlook for monetary policy as the Fed guides the U.S. through its recovery.
Here are three things that could affect markets tomorrow:
1. All eyes and ears on Fed’s Powell
Powell is scheduled to speak just after 9:00 AM ET (1300 GMT) at the central bank’s virtual annual conference (this is normally held in person at Jackson Hole, Wyoming). At this point, the Fed is trying to boost inflation by allowing it to track above its 2% target rate, even though inflation has been below that level for most of the last decade. With interest rates at or close to zero, real rates have turned negative.
The Fed needs more inflation to charge growth back into an economy that has been badly damaged by the effects of the global pandemic, especially since low rates have given it little flexibility in loosening monetary policy. Powell is expected to offer a summary of the Fed’s year-long review of monetary policy initiatives.
2. Economic data on jobs and output
Thursday is when weekly unemployment numbers come out at 8:30 AM ET (1230 GMT). Analysts tracked by Investing.com expect initial claims will be 1 million, down slightly from the 1.1 million new unemployment claims the previous week. Continued jobless claims are expected to be 14.4 million, also down slightly from 14.8 million the prior week.
The unemployment trend has improved from the worst of the economic crisis sparked by mass business shut downs this spring, but new claims have persisted at or above the 1 million mark, suggesting companies continue to struggle. Federal pandemic unemployment insurance payments of $600 on top of state benefits also expired, and Congress has yet to approve new emergency aid.
Gross national product for the second quarter will be revised again, with the number expected out at 8:30 AM ET (1230 GMT). The expectation is that output fell 32.5% from the first quarter. That is better than the 34.3% initially estimated last month.
3. Pandemic beauty habits fall by the wayside
Americans’ beauty regimens fell to the wayside during the lockdowns as people took to sweatpants and accepted scraggly eyebrows and bad dye jobs.
Cosmetics giant Coty Inc (NYSE:COTY), which runs the Covergirl, OPI, and Clairol brands, is expected to post a loss per share of 13 cents on revenue of $1.27 billion. Any declines in salon product sales could be offset by gains from its Adidas (OTC:ADDYY) and Gucci brands. Shares fell 1.8% on Wednesday.
Makeup retailer Ulta Beauty Inc (NASDAQ:ULTA) is expected to report profit of 10 cents a share on revenue of $1.26 billion. Shares rose 0.4% on Wednesday.
