Drug Profits, Microsoft, Consumer Confidence: 3 Things to Watch

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Investing.com — U.S. markets tumbled on Monday, with just over one week until the Nov. 3 election and at the start of a heavy week for company earnings reports.

The Dow Jones Industrial Average shed more than 800 points at midday, closing down around 649 points. That is sure to be unwelcome news in President Donald Trump’s camp. The Republican candidate has been campaigning on economic recovery hopes and frequently points to the stock market as a symbol of his success.

Monday’s culprit: A worrisome spike in new coronavirus infections even as Trump said over the weekend that the U.S. was turning the corner on the pandemic. Not helping: Congressional negotiations stalling out on a new round of stimulus to help the economy recover from Covid-related lockdowns.

Business owners and consumers in hot spot states — which seems to make up most of the U.S. — now face the possibility that things might have to shut down again if record numbers of infections can’t be contained. Already in Europe, governments have had to reimpose restrictions.

Big U.S. companies are on tap to report their most recent quarterly results this week, with Tuesday’s calendar including pharmaceutical giants, industrial companies and Microsoft. A consumer confidence reading is also on the schedule. 

Here are three things that could affect the markets tomorrow.

1. Drug maker profits as investors await news on Covid treatments

Four major drug makers tee off profit reports before the opening bell as investors crave any information at all about the progress of possible Covid vaccines and treatments. 

Profits for Merck & Company Inc (NYSE:MRK) are expected to be $1.44 a share on revenue of $12 billion, according to analysts tracked by Investing.com. Pfizer Inc (NYSE:PFE) profits are expected to be 69 cents a share on revenue of $12.3 billion. 

Novartis AG ADR (NYSE:NVS) is seen reporting profit of $1.44 a share on revenue of $12.6 billion, and Eli Lilly and Company (NYSE:LLY) is expected to report earnings of $1.71 a share on revenue of $5.9 billion.

2. Big-name industrials and tech also expected

Caterpillar Inc (NYSE:CAT) is expected to report profit of $1.17 on revenue of $9.7 billion, and 3M Company (NYSE:MMM) is seen posting $2.26 a share on revenue of $8.31 billion.

On the tech side, Advanced Micro Devices Inc (NASDAQ:AMD) is seen posting profit of 35 cents on revenue of $2.6 billion, while Microsoft Corporation (NASDAQ:MSFT) is expected to report $1.54 on revenue of $35.7 billion.

3. Measuring consumer confidence heading into election

Consumer confidence readings for October will come out at 10:00 AM ET (1400 GMT). The expected number is 102, which would be slightly higher than 101.8 the prior month.

The reading is important as a sign that there is support for spending, which drives two-thirds of U.S. economic output. Millions of households are feeling the pressure of lost jobs and wages, and Congress remains stalled on negotiations for another relief package.