Fed and ECB Minutes, Pepsi and Delta Earnings: What Investors Need to Know This Week
PepsiCo's quarterly report on July 9 may reflect consumer sentiment in the world's largest economy / Photo: rblfmr/Shutterstock.com
The main event on this week’s economic calendar appears to be the release of the minutes from the first meeting of the U.S. Federal Reserve under Kevin Warsh’s leadership. Investors will be looking for clues as to whether interest rates will rise and, if so, when exactly that will happen. In Europe, the minutes of the ECB meeting will be released. In Asia, market attention will be focused on inflation data from China: following the ceasefire in the Middle East, investors want to understand whether the energy shock is still significant, according to The Wall Street Journal.
Wall Street traders will get a rare breather: only two S&P 500 companies will report earnings, according to Barron's. The main highlights are expected to be the results from PepsiCo and Delta Air Lines. PepsiCo’s report will give investors insight into U.S. consumer sentiment, while Delta’s earnings will serve as another indicator of the fallout from the U.S.-Iran conflict and the resulting fuel crisis, according to Yahoo Finance.
On Monday, July 6, the Institute for Supply Management will release the U.S. Services Business Activity Index for June. The consensus forecast calls for a reading of 54.2 points, slightly below May’s level. The June ISM report may draw heightened attention, notes the WSJ: investors want to understand whether the U.S. economy is maintaining its growth momentum.
On Tuesday, July 7, the Bureau of Economic Analysis will release data on the U.S. trade balance for May. The consensus estimate calls for the trade deficit in goods and services to rise to $79 billion from $56 billion in April.
On Wednesday, July 8, the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve will release the minutes of its June monetary policy meeting. At that meeting, the central bank left the federal funds rate unchanged —in the range of 3.5% to 3.75%. This was the first FOMC meeting chaired by Kevin Warsh, who succeeded Jerome Powell in May. Warsh reaffirmed the Fed’s 2% inflation target, and Wall Street interpreted this as a signal in favor of a tighter monetary policy. According to Barron’s, traders are now pricing in a 25-basis-point rate hike by the end of October—earlier than Wall Street had anticipated until recently.
Levi Strauss will present its quarterly financial results.
On Thursday, July 9, the European Central Bank will release the minutes of its June meeting, at which the central bank raised its policy rate by 25 basis points, bringing it to 2.25%.
China is set to release its June inflation data. It’s worth keeping an eye on these figures to understand how the reflationary scenario is unfolding: the fallout from the Iran crisis is pushing prices higher, but domestic demand remains weak, according to the WSJ. According to Crystal Tan, an Asia economist at ANZ Research, annual consumer inflation held steady at 1.2% last month, while producer price inflation accelerated to 4% from 3.9% the previous month.
PepsiCo will report its quarterly earnings.
On Friday, July 10, Delta Air Lines will report its quarterly results. The airline's stock has risen by a third since the beginning of the year and hit a new all-time high last week.
This article was AI-translated and verified by a human editor
