Inflation in the U.S. and Europe, Banks, and TSMC: What Investors Need to Know This Week
The release of U.S. inflation data for June is the main event on this week’s macroeconomic calendar / Photo: 6428W Digital Art/Shutterstock.com
After a relatively quiet week, investors are in for a busy five-day stretch: the largest U.S. banks will kick off the second-quarter earnings season, and the macroeconomic calendar features several important events, according to Yahoo Finance.
The most important of these is the release of the U.S. Consumer Price Index. The inflation data will help investors assess whether the Federal Reserve will decide to raise interest rates and when that might happen. The market will also continue to monitor developments in the Middle East and their impact on oil prices, according to The Wall Street Journal.
A week packed with economic data is also on the horizon for China and the eurozone.
More than half of the 30 companies in the S&P 500 index that will report quarterly results this week are in the financial sector. Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Wells Fargo will report, followed by BlackRock and Morgan Stanley. Several heavyweights from other industries will also report earnings: TSMC, ASML, Johnson & Johnson, GE Aerospace, Netflix, and UnitedHealth, according to Barron’s.
On Monday, July 13, the U.S. Department of the Treasury will release a report on the federal budget execution for June.
On Tuesday, July 14, the U.S. Bureau of Labor Statistics (BLS) will release the Consumer Price Index (CPI) for June. Economists expect annual inflation in the world’s largest economy to slow to 3.8% on average—0.4 percentage points below May’s level. The Core CPI, which excludes volatile food and energy prices, is expected to rise by 2.8% after 2.9% the previous month.
LSEG data shows that the money market is currently fully pricing in a 25-basis-point rate hike by the Fed in December and considers an earlier move in October highly likely. A slowdown in inflation, particularly core inflation, could prompt investors to scale back these expectations. If core CPI falls below 2.5% by the end of the summer, the market will completely rule out the possibility of a rate hike, according to Citi analysts.
China will release foreign trade data. Investors will be watching these figures closely amid growing tensions between Beijing and Brussels: The EU is concerned about the rapid increase in Chinese goods entering the European market, the WSJ notes.
Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Wells Fargo will report their quarterly results.
On Wednesday, July 15, the BLS will release the Producer Price Index for June. The consensus forecast calls for a 6.2% year-over-year increase.
The Federal Reserve will release its "Beige Book" for the fifth time this year out of eight. It contains information on the current state of the economy.
The highlight of a week packed with economic data in China will be the release of second-quarter GDP figures and June economic activity data. Economists surveyed by The WSJ expect the Chinese economy to have grown by 4.5% year-over-year, following 5% growth in the first quarter.
Industrial production data for May will be released in the eurozone.
ASML, BlackRock, Johnson & Johnson, Morgan Stanley, and United Airlines will report their financial results.
On Thursday, July 16, the U.S. Census Bureau will release retail sales data for June. Economists forecast a 0.3% increase from the previous month, following a 0.9% jump in May. Excluding automobiles, sales are expected to decline by 0.1% after rising 0.8%.
The Eurozone will release its foreign trade statistics for May.
TSMC, Alcoa, GE Aerospace, Netflix, Prologis, and UnitedHealth will report their quarterly results.
On Friday, July 17, the University of Michigan will release the July U.S. Consumer Sentiment Index. The consensus forecast is 51.5 points—two points higher than June’s reading. Sentiment has improved after falling to a historic low in May, but remains well below average levels, according to Barron’s.
The final inflation estimate for June will be released in the eurozone. According to Allianz Research, the peak in price growth has likely already passed: oil supplies are returning to normal, and commodity prices have fallen even below pre-war levels.
Volvo will publish the report.
This article was AI-translated and verified by a human editor
