3 Things to Watch in the Stock Market This Week

By Markets Fool.com

Stocks logged minor gains last week that were still enough to produce fresh record highs. In fact, on Thursday the Dow Jones Industrial Average(DJINDICES: ^DJI), the S&P 500 (SNPINDEX: ^GSPC), and the Nasdaq (NASDAQINDEX: ^IXIC) all closed at a new record -- marking the first time that the three indexes have jointly celebrated records on the same day since late 1999.

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Major indexes are now up nearly 7% so far this year.

^SPX data by YCharts.

The week ahead promises several powerhouse earnings reports for investors to watch for, including from Dow giants Cisco Systems (NASDAQ: CSCO) and Wal-Mart Stores (NYSE: WMT), following a highly anticipated report from the Federal Reserve.

Wednesday, Aug. 17: Federal Reserve meeting minutes

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Investors' attention will be trained on the Federal Reserve on Wednesday as the central bank publishes minutes from its July meeting at 2 p.m. ET. Fed officials last month declined to raise interest rates while noting that economic activity appeared to be picking up thanks in part to strong job gains for the month of June following a weak May result.

The unemployment rate is back below 5%. Image source: Federal Reserve Economic Data.

More recent evidence has been pointing to continued positive momentum: Job growth in July hit 255,000 as June and May's figures were both revised higher. The economy has now averaged 190,000 new jobs per month over the past three months. In light of that solid pace, and with the stock market near all-time highs, investors will be parsing the Fed's latest thinking for signs that another rate hike might be coming after its late September policy meeting.

Wednesday, Aug. 17: Cisco earnings

Networking titan Cisco will post its third-quarter results after the closing bell on Wednesday. The stock is on a tear lately, having recently passed $30 per share for the first time since late 2007.

Image source: Getty Images.

Major gains in growth areas like security, collaboration, and data centers helped Cisco post higher sales last quarter despite declines in two of its biggest divisions: switching and routing.

The company's shift away from hardware and toward a software-and-subscription service model is also helping with profitability, as gross margin improved by a percentage point to reach 65% of sales.

Many of Cisco's markets remain challenged by weak tech spending, though, and the recent Brexit vote could have increased volatility around customer orders. Still, CEO Chuck Robbins and his team projected earning $0.60 per share this quarter, up $0.01 over the prior year, while sales remain roughly flat. Investors will be listening for Robbins' updated thoughts on how Cisco's transformation strategy is going this week.

Thursday, Aug. 18: Wal-Mart earnings

Wal-Mart is the second-best performer on the Dow this year heading into its Q3 earnings release on Thursday morning. Shares have risen as increased store investments helped fuel a steady rebound in customer traffic. The retailing giant is hoping to announce its eighth straight quarter of positive comparable-store sales.

Besides the traditional key metrics of comps, earnings, and cash flow, investors should hear plenty more about Wal-Mart's aggressive plans to boost its e-commerce capabilities. Last week it announced a $3 billion purchase of Jet.com, which executives believe will help Walmart.com steal market share. "The acquisition of Jet will infuse Wal-Mart with fresh ideas and expertise," CEO Doug McMillon said in a press release, "as well as an attractive brand with proven appeal, especially with millennials, the first generation of true digital natives."

Shareholders have to hope that this buyout is more of a bet on complimentary growth rather than an admission that Wal-Mart's physical retailing model is on the decline. Continued customer traffic gains and steady profit margins in Thursday's announcement would put off those concerns -- for now.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.