Here are the 3 big things we’re watching in the stock market this week
We are entering the silence before the earnings storm. We are past the Independence Day-shortened trading week. So is the June jobs report and the long-awaited Honeywell Aerospace spinoff. Of course, there can always be something that surprises us and sends Wall Street into a tailspin. You might even argue that we can rely on it. But when it comes to the actual calendar, the first week of July is light on both earnings and market-moving economic reports. The calm will not last long. The trading week of July 13 through July 17 marks the official start of second-quarter earnings season, with reports from the nation’s largest banks; It will also include June inflation data, where we will look for signs of a peak in oil-driven inflation. OK. Before we go too far, let’s take a closer look at a few key things planned for this week and a key market theme to watch. 1. Earnings: Although no club names have been reported, a few names that take the pulse of the US economy are on the agenda. The three biggest reports are Levi Strauss on Wednesday evening, PepsiCo on Thursday morning, and Delta Air Lines before the bell Friday. Levi’s is all about the consumer. Given the recent rebound in inflation and the affordability crisis resulting from higher oil prices, how are shoppers allocating their discretionary dollars? While the price of crude oil has fallen, the price consumers pay at the pump has fallen much more slowly. U.S. oil benchmark WTI crude is down 27% from a month ago, while the national average for a regular gallon of gas is 10.5% lower, AAA data showed Thursday. Moreover, despite signs that prices will decline further, the shock of higher prices may still be fresh in people’s minds and coloring consumers’ purchasing decisions. Some company-specific questions: Have clever marketing efforts around the World Cup (particularly FIFA forcing the company to cover its logo at Levi’s Stadium in California) resulted in a tangible sales advantage? We’ll also hear comments from CEO Michelle Gass about her efforts to recruit more female customers, which she discussed with Jim Cramer in the past on “Mad Money.” Meanwhile, Pepsi may provide insight into inflationary pressures in the food industry. Given our stake in Eli Lilly, a leading manufacturer of obesity drugs, commentary on demand dynamics as GLP-1 becomes increasingly adopted will be noteworthy. Pepsi and other food brands are moving into products containing protein, due in part to the rise of GLP-1s. While central bankers and economists often look at core inflation indicators that exclude food due to price volatility, consumers can’t stop buying food. As a result, food inflation is tightening the amount of money people have left over to buy things like Levi’s jeans and airline tickets, which brings us to our next earnings preview. Delta Air Lines is probably the most interesting and informative of the three major reports. Because air travel represents such a large discretionary cost, it may be a little more revealing about consumers’ spending appetites than, say, Levi’s. The company can also enlighten us on how falling crude oil prices translate into cheaper prices for final goods (in this case, jet fuel). It’s worth noting that Delta is unique among its U.S. peers in that it owns an oil refinery, giving them an advantage in fuel costs. Jet fuel and diesel belong to the same group of refined petroleum products known as middle distillates. As a result, jet fuel dynamics may offer some clues about diesel (certainly a big cost for club names like FedEx Freight and FedEx Corp). However, the reading for gasoline used in cars is slightly less direct, given that gasoline comes from the slightly distillate fraction where crude oil is heated, vaporized and separated. 2. Economic data: Following Thursday’s weaker-than-expected June employment report, we’ll get two updates this week on activity in the services sector (a broad and important collection of industries that includes healthcare, real estate, food and finance). On Monday, S&P Global will release its purchasing managers’ index for service providers at 9:45 a.m. ET. Then, in just 15 minutes, the Institute for Supply Management will release its own PMI for the services sector. While these reports vary slightly, their goal is the same: to provide timely information on business activity across the country based on survey responses from companies in the field. Think of these as monthly check-ups. What we particularly like about the ISM report is that it includes an anonymized “what respondents say” section that offers nice detail to complement the quantitative aspects of the survey. While we do not make buying or selling decisions based on a single PMI reading, they, along with official government data and companies’ results and commentary, influence our understanding of the economy. On Thursday, the National Association of Realtors released existing home sales for June; Here we will look for any signs of improvement in the stagnant US housing market. Our position at Home Depot is a bet that mortgage rates will eventually fall to levels that will unleash years of pent-up demand in housing, boosting sales and profits. 3. AI Trading: The final two trading days of last week sparked fierce selling among the semiconductor industry and other AI beneficiaries. As a result, the iShares Semiconductor ETF (SOXX) and VanEck Semiconductor ETF (SMH) are currently trading within a few percentage points of their 50-day moving averages. This is an important technical level followed and used by investors, showing the trend of a stock or index. It can also act as a support level or resistance level in technical analysis. So we’ll look to see if buyers will step in to support the semiconductor trade that’s fueled Wall Street’s strong start to 2026. Or perhaps hopes for a less hawkish Federal Reserve, thanks to a tepid June jobs report, are keeping the expanding trade buoyant at the expense of first-half winners. This rotation was quite evident in our portfolio on Wednesday and Thursday; Names like AI winner Corning sold hard, and the once-unloved Johnson & Johnson finished the week with a record close. While it’s rarely fun to see your stocks fall, the Corning situation is a good reminder of why we like to cut stocks after a parabolic move. We did this on Tuesday, before the stock fell 23% over two days. J&J’s recent strength is a reminder of why we never give up on diversity. Next week, Monday, July 6 S&P Global services PMI 9:45 a.m. ET ISM services PMI Tuesday, July 7 10 a.m. ET Before the bell: No rating reports After the bell: Penguin Solutions (PENG) Wednesday, July 8 Census Bureau wholesale trade report for May 10 a.m. ET Federal Reserve June policy meeting minutes 2 p.m. ET Before the bell: Helen of Troy (HELE) After the bell: Levi Strauss (LEVI), AZZ (AZZ) Thursday, June 9 Initial unemployment claims 8:30 a.m. ET Existing home sales 10 a.m. ET Before the bell: PepsiCo (PEP), Simply Good Foods (SMPL) After the bell: WD-40 (WDFC) Friday, July 10 Before the bell: Delta Airlines (DAL) After the bell: No grade report (Jim Cramer’s Charitable Trust long FDXF, FDX, HD, See here for a complete list of HONA, JNJ, GLW and CAH Stocks.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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