THE The biggest economic event of July came and went.
For the rest of the month, investors will focus most of their attention on the corporate earnings calendar.
Netflix (NFLX) will be the first major tech company to report quarterly results in the current reporting period, with the streaming giant set to report after the close on Thursday.
And as the AI sector continues to dominate Wall Street, investors will be paying close attention to ASML’s (ASML) and Taiwanese semiconductor manufacturing company (TSM), which are scheduled for release on Wednesday and Thursday respectively.
ASML is the leading maker of lithography machines, which allow companies to print their designs onto new chips. TSMC is the world’s largest chipmaker.
Elsewhere in the earnings calendar, reports from Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC) will close the results of the largest Wall Street banks, while Dow members Johnson & Johnson (JNJ), American Express (AXP), UnitedHealth (A H), and travelers (VRT) should all report.
Politics will also be a major concern for investors after Donald Trump Survived Assassination Attempt at a rally in Pennsylvania on Saturday. Business leaders were quick to react to the events of the daycondemning political violence and praising the former president “courage under literal fire (Saturday night).”
The Republican National Convention is scheduled to be held this week in Milwaukee, where Trump will be officially nominated as the Republican presidential nominee.
The economic data calendar will be light, with the June retail sales report out Tuesday as the highlight. After May’s results showed a surprising slowdown in spendingInvestors and Fed watchers will be watching the results for signs of further weakness in the U.S. consumer.
The Oxford Economics team expects retail sales to decline 0.4% in June, although the overall decline will be driven by lower gasoline prices. “We expect underlying control group sales to rise 0.3%, which, together with lower prices in June, will translate into a strong increase in real consumption to end the second quarter,” the firm wrote in a note published Friday.
« The consumer is still healthy, supported by a labor market that is calming, not collapsing, and by the strength of household balance sheets. »
Thursday’s inflation data has shaken the marketswith everything that was working (read: the names of the “Magnificent Seven”) under pressure and what had been left behind, notably small caps, booming. Yet, Friday Rally Stocks continued to advance over the weekend with another weekly gain across the board.
July ➡️ September
June inflation data released last week seemed almost to consolidate the outlook of the Federal Reserve’s interest rate cuts starting in September.
A multi-year low in annual inflation and the first monthly decline in headline inflation since 2020 have pushed the chances of rate cuts starting in the fall to more than 85%, CME Group data showed.
In June, headline inflation fell by 0.1% from the previous month and rose by 3% from a year earlier. On a core basis, which excludes food and energy costs, consumer prices rose by 0.2% from a month earlier and by 3.3% from a year earlier.
The Fed is targeting 2% inflation.
The June jobs report released earlier this month raised the temperature on the Fed to act in SeptemberThe rise in the unemployment rate to 4.1% indicates that the pace of the labor market cooling appears to be accelerating and puts the labor market back at the center of the central bank’s concerns after nearly two years of inflation being its primary concern.
Fed Chairman Jerome Powell’s appearance on Capitol Hill last week made clear the central bank’s decision this fall. will be seen as a political decision by critics on both sides of the political spectrumBut the economic basis for a rate cut has only become clearer in recent weeks.
“Overall, economic data are the most supportive of a rate cut since the start of the year,” Wells Fargo economists Sarah House and Michael Pugliese wrote in a client note this week.
As Yahoo Finance’s Jared Blikre noted this week, the unemployment rate is now about to trigger the Sahm rulewhich measures the rate of increase in the unemployment rate and has been a leading indicator in each of the last nine U.S. recessions.
On July 31, Powell will hold a press conference following the Fed’s next policy meeting. That event, along with Powell’s speech at the Jackson Hole Economic Symposium in late August, will give the Fed chair plenty of opportunity to prepare markets for a September decision.
Weekly calendar
Monday
Economic data:New York Fed Empire State Manufacturing Index, July (-6 expected, -6 previously)
Earnings: Goldman Sachs (GS), Black rock (BLK)
Tuesday
Economic data: Retail Sales, June (-0.2% expected, +0.1% previously); Import Price Index, June (-0.1% expected, -0.4% previously); Export Price Index, June (-0.1% expected, -0.6% previously); NAHB Homebuilder Sentiment, July (43 expected, 43 previously)
Earnings: Bank of America (BAC), Morgan Stanley (MS), UnitedHealth (A H), Charles Schwab (SCHW), Interactive Brokers (IBKR), Progressive (PGR), PNC Financial (PNC), State Street (STT)
Wednesday
Economic data: Housing starts, June (+1.8% expected, -5.5% previously); Building permits, June (-0.6% expected, -3.8% previously); Industrial production, June (+0.4% expected, +0.9% previously); Federal Reserve Beige Book
Earnings: Johnson & Johnson (JNJ), United Airlines (UAL), ASML (ASML), Discover (DFS), US Bancorp (USB), Financial Citizens (CFG), Ally Financial (ALLY), Synchrony (SYF), Alcoa (AA), Kinder Morgan (KMI), Steel Dynamics (STLD)
THURSDAY
Economic data:Initial jobless claims, July 13 (228,000 expected, 222,000 previously); Continuing jobless claims (1.852 million previously)
Earnings:TSMC (TSM), Netflix (NFLX), Domino’s (DPZ), Black stone (BX), Alaska Air (ALK), Abbott Laboratories (About), Novartis (NVS), Textron (SMS), Ribbons (CTAS), Intuitive Surgery (ISRG), PPG (PPG)
Friday
Economic data: No major economic data to be published.
Earnings: American Express (AXP), Travelers (VRT), Halliburton (HAL), SLB (SLB), Fifth Third (FITB), Financial Regions (RF)
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