Macroeconomic/ geopolitical developments
- The stock market is experiencing a notable shift away from mega-cap tech stocks like the Magnificent 7, towards smaller and midcap companies, driven by disappointing earnings from Tesla and Alphabet, and bolstered by rising investor confidence in potential Federal Reserve rate cuts.
- Disappointing earnings from Alphabet and Tesla led the S&P 500 and Nasdaq to multi-week lows, highlighting broader market concerns over the sustainability of high valuations in major tech stocks.
- The core PCE price index remained at 2.6% in June, above the 2.5% forecast, complicating the Federal Reserve’s plans for rate cuts and increasing market speculation of a possible rate cut by September.
- The week starting Monday, July 29, will be the busiest of the third quarter earnings season, featuring key earnings reports from Microsoft, Apple, Meta, and Amazon, crucial interest rate decisions from the US Federal Reserve and Bank of England, and significant economic data releases including the US Labor Department’s employment report and manufacturing PMIs.
Global financial market developments
- US and global equity averages extended lower
- US bonds were little changed on the week, European bonds were lower in yield
- The US Dollar Index marked time in consolidation mode
- Gold futures sold off
- Oil futures probed lower.
Key this week
Central Bank Watch: The main central bank activities this week are the Bank of Japan Interest Rate Decision and Monetary Policy Statement on Tuesday, Federal Reserve Interest Rate Decision and Monetary Policy Statement on Wednesday and the Bank of England Interest Rate Decision, Monetary Policy Statement and Minutes on Thursday.
Macro Data Watch: The main macro data release this week is the Global Manufacturing PMI and US ISM Manufacturing PMI on Thursday and the US Job Report on Friday . Some other releases of note are the EU GDP on Tuesday, EU CPI on Wednesday and US Factory Orders on Friday.
Earnings Watch: Key focus will be on four of the Magnificent Seven earnings next week; with Microsoft on Tuesday, Meta on Wednesday, then Apple and Amazon on Thursday.
| Date | Major Macro Data |
| 07/29/2024 | Nothing of note |
| 07/30/2024 | EU GDP; Japanese Employment Report; German CPI and GDP |
| 07/31/2024 | BoJ Interest Rate Decision, Monetary Policy Statement; German Retail Sales, Employment Report; EU CPI; Fed Interest Rate Decision, Monetary Policy Statement |
| 08/01/2024 | Global Manufacturing PMI;US ISM Manufacturing PMI; BoE Interest Rate Decision, Monetary Policy Statement, Minutes |
| 08/02/2024 | US Employment Report, Factory Orders |
| Date | Major Earnings Data |
| 07/29/2024 | McDonald’s |
| 07/30/2024 | Microsoft; P&G; Merck&Co; AMD; Pfizer; S&P Global; Stryker; Starbucks; PayPal |
| 07/31/2024 | Meta Platforms; Mastercard; T-Mobile US; Qualcomm; Arm |
| 08/01/2024 | Apple; Amazon; Intel |
| 08/02/2024 | Exxon Mobil; Chevron; Linde Plc |
