Earnings season will shift into high gear over the next couple of weeks, and profitability is expected to be very strong. This quarter’s earnings will be substantial compared to last year's second quarter, which saw the greatest impact from the pandemic. Market expectations are for strong earnings, and any companies that disappoint will likely see a significant reaction in their stock prices at these valuation levels.
The uptick in COVID-19 cases around the world and the announcement of the OPEC+ deal have helped push bond yields lower. The 10-year Treasury is now trading with a yield below 1.25% despite concerns about inflation.
This week, I will be keeping an eye on Washington and the Senate’s procedural motions on the administration’s spending plans, as well as the IPO of Robinhood.
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