July 15, 2024
CURRENCIES
The ECB is expected to signal a rate cut for September:
- The ECB is likely to keep interest rates unchanged at Thursday’s meeting, but will provide guidance for a rate cut in September. Markets are expecting a 45 basis point cut in 2024.
China plenum:
- Beginning Monday, July 15, this significant meeting will discuss major policies and could impact China’s financial markets.
Inflation Reports of United Kingdom, Europe, Japan and Canada:
- Reports from Canada, the UK, the Euro Area, and Japan, alongside China’s Q2 GDP, UK employment data, and ZEW sentiment readings from Germany and the Euro Area, are expected to create volatility in FX markets.
US earnings season:
- Notable releases from BlackRock, Goldman Sachs, Bank of America, Morgan Stanley, Netflix, and Taiwan Semiconductor Manufacturing.
US tech stocks are facing scrutiny:
- The Nasdaq 100 and S&P 500 face examination after Thursday’s correction, with concerns about the dependence on a small percentage of stocks for driving index growth.
STOCK MARKET
Corporate earnings focus:
- Netflix (NFLX) will report quarterly earnings after market close on Thursday.
- ASML (ASML) and Taiwan Semiconductor Manufacturing Company (TSM) to report on Wednesday and Thursday, respectively.
Big tech and AI trade:
- ASML, the leading manufacturer of lithography machines, and TSMC, the world’s largest chip manufacturer, will be closely watched for updates.
Financial sector earnings:
- Reports from Goldman Sachs (GS), Morgan Stanley (MS), and Bank of America (BAC) will conclude Wall Street’s big bank earnings.
- Additional reports from Johnson & Johnson (JNJ), American Express (AXP), UnitedHealth (UNH), and Travelers (TRV).
Economic data highlights:
- Retail sales report (June): Set for release on Tuesday, with expectations of a 0.4% decline due to lower gas prices, but a 0.3% rise in core sales.
- Inflation data impact: June’s inflation data influenced market trends and heightened the prospects of Federal Reserve rate cuts starting in September.
Federal Reserve outlook:
- Recent economic data, including a multiyear low in annual inflation and a rising unemployment rate, support the likelihood of a rate cut.
- Fed Chair Jerome Powell will hold a press conference on July 31 and speak at the Jackson Hole Economic Symposium in late August to prepare markets for potential September rate cuts.
Market movement:
- S&P 500 closed with a weekly gain, despite inflation data shaking market confidence.
Additional insights:
- Despite economic fluctuations, the consumer market remains strong, bolstered by a stable labor market and healthy household balance sheets.
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