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Investing.com — Stocks recovered early losses on Monday to kick off a busy week of earnings reports from big tech companies, with hopes for a swift approval of new stimulus fading from view.
There were a couple of eye-popping moves in stocks as the short-selling favorite GameStop Corp (NYSE:GME) whipsawed. AMC Entertainment Holdings Inc (NYSE:AMC) soared after the CEO said recent successful fundraising means there’s no need for a bankruptcy filing.
President Joe Biden has proposed a $1.9 trillion stimulus, but it faces resistance with Republicans in the Senate. The thinking now is that the administration will have to scale back some of its ambitions or present the stimulus in a series of smaller packages.
Financial and energy stocks fell on Monday, with the latter pressured by weaker oil prices on demand worries. The Federal Reserve starts its regular two-day meeting on Tuesday and will likely discuss the state of the economic recovery.
Here are three things that could affect markets tomorrow:
1. GameStop captivates the investing public
GameStop, the video game retailer, is the topic of the town lately after its shares have been taken on a wild ride by short sellers and retail investors. On Monday, the stock jumped more than 140% in volatile morning trading but then gave it all back, and then rose again, even with intermittent trading halts.
Analysts don’t think the stunning run-up in the shares is justified. On Monday, Telsey Advisory Group downgraded it to a sell-equivalent from a buy-equivalent. At about $85 as of midday, the shares will likely continue to be extremely volatile. Buckle (NYSE:BKE) your seatbelts.
2. Earnings from AMD and Microsoft
This is a big week for corporate earnings, and after Tuesday’s closing bell we get reports from AMD and Microsoft.
Advanced Micro Devices Inc (NASDAQ:AMD) is expected to report earnings per share of 47 cents on revenue of $3 billion. Microsoft Corporation (NASDAQ:MSFT) is expected to report EPS of $1.64 on revenue of $40.2 billion.
3. Fed starts its regular meeting
It’s the Federal Reserve’s first meeting under the Biden administration, which has floated a $1.9 trillion coronavirus relief package, including payments to families and money for states and local economies.
The Fed has pledged to back the economy in any way it can. The central bank’s latest rate decision is due out on Wednesday, and observers expect rates to be held steady with further commentary about the outlook for an economic revival.
Consumer confidence is one way of getting things back on track. The reading for the current month is due out at 10:00 AM ET (1400 GMT) on Tuesday.
