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Day Ahead: 3 Things to Watch for August 18

imageStock Markets5 hours ago (Aug 17, 2020 04:14PM ET)

(C) Reuters.

By Liz Moyer

Investing. com — The S&P 500 made another attempt at a record on Monday, but ended just shy of the mark, while a rally in tech stocks failed to lift the Dow.

The S&P 500 flirted with its Feb. 19 record high but fell a couple of points below it, closing at 3,383, up 0.3%. The Dow Jones Industrial Average fell 0.31% and the NASDAQ Composite gained 1%.

This is a big week for retail earnings, with analysts anticipating e-commerce gains at least partially offsetting lower revenue because of Covid-related store closings this spring.

Here are three things that could affect the markets tomorrow:

1. Fear that lack of stimulus could lead to credit losses is weighing on financials

Financials were among Monday’s worst-performing sectors following a regulatory filing last week that said Warren Buffett’s Berkshire Hathaway B (NYSE:BRKb)had pared back some of its bank stock holdings. But investors are also worried about the delay in another round of stimulus that could lead to a worsening of credit quality at major lenders.

So far, damage seems to be contained. On Monday, American Express Company (NYSE:AXP) reported its card numbers for July. Consumer card member loans were written off at a rate of 2.6% versus 2.6% for the prior month. Consumer loans 30 days past due were 1.4% of the portfolio versus 1.5% in the prior month. The small business card member loans net write off rate was 2.5% versus 2.4% in June

Citigroup Inc (NYSE:C) also reported its July card numbers, according to Credit losses in July were 2.42% versus 2.63% in June but 30-day delinquencies spiked to 7.43% from 1.47%.

2. Home Depot sets the tone for retailer earnings this week

Home Depot Inc (NYSE:HD) is expected to report earnings on Tuesday morning, but already the shares were moving higher after the WSJ reported that daily foot traffic since April has been 35% higher than last year, according to Apparently people spent the pandemic organizing do-it-yourself projects around the home.

The stock has doubled since March. Home Depot kicks off a busy week for retailers, and is seen as setting the tone for the quarter. Analysts tracked by see EPS at $3.60 a share on revenue of $34 billion.

3. New York’s opening gyms, so what does that mean for exercise stocks?

New York Gov. Andrew Cuomo has cleared the way for gyms to reopen in the state, which could be welcome news to many exercise enthusiasts who have been cooped up at home or forced to go on road runs and do other outdoorsy distancing-friendly fitness activities. Shares of gym chain Planet Fitness Inc (NYSE:PLNT) rose 0.7% on Monday following the announcement.

But the return to the gym isn’t deterring investors in at-home bicycle fan favorite Peloton Interactive Inc (NASDAQ:PTON), which was up 1.34%. Nautilus Group Inc (NYSE:NLS), which also makes fitness equipment, dipped 0.3%. Meanwhile, shares of WW International Inc (NASDAQ:WW), the company formerly known as Weight Watchers, fell 3.1%.

Day Ahead: 3 Things to Watch for August 18

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