Magnificent Seven earnings and the Fed meeting: what investors need to know this week
Donald Trump's August deadline on duties is no longer weighing on Wall Street: the U.S. S&P 500 and Nasdaq Composite indexes ended last week at all-time highs, while the Dow Jones came close to the record, writes Barron's. The U.S. trade agreement with the European Union, concluded on July 27, should add to investor optimism early this week.
Several important events could test investors' optimism this week: the U.S. Federal Reserve's interest rate meeting, the release of key macro statistics in the United States and the EU, and earnings reports from technology giants, noted Barron's.
This week is the busiest week of the second-quarter reporting season: about 150 companies from the S&P 500 will release their financial results, including four of the "Magnificent Seven" corporations: Microsoft, Meta, Apple and Amazon. A third of the companies in the index have already reported, and the start to the season has been strong, with more than 80 percent beating earnings-per-share forecasts and nearly 80 percent beating revenue. In London, earnings reports are being released by AstraZeneca and Shell - the oil and gas giant has already warned of weak trading performance in the past quarter.
On Monday, July 28, Essilor Luxottica, Heineken, Porsche and Whirlpool will report quarterly earnings.
On Tuesday, July 29, the U.S. Bureau of Labor Statistics (BLS) will release job openings data. The consensus forecast is for 7.45 million open jobs at the end of June, 300,000 fewer than a month earlier.
AstraZeneca, Boeing, Christian Dior, Kering, L'Oreal, Merck, Mondelez, PayPal, Procter & Gamble, Spotify, Royal Caribbean Group, Starbucks, Stellantis, UnitedHealth Group, UPS and Visa will disclose last quarter's financial reports.
On Wednesday, July 30, the Federal Reserve will announce the decision on the interest rate, and its chairman Jerome Powell will summarize the results of the two-day meeting of the regulator. A team of analysts at ING believes that the meeting of the U.S. Central Bank will be held without surprises: the rate will remain the same, and the program of quantitative tightening is unlikely to change, reports The Wall Street Journal. Therefore, Wall Street's attention will focus on the disagreements within the regulator: members of the Fed's Board of Governors Christopher Waller and Michelle Bowman are in favor of a rate cut, writes Barron's.
The U.S. Commerce Department's Bureau of Economic Analysis (BEA) publishes a preliminary estimate of the nation's second-quarter GDP growth. The consensus is for a 2.4% seasonally adjusted annualized growth rate. GDP in the world's largest economy contracted 0.5% in the first quarter, partly due to imports outpacing imports in anticipation of duties, which significantly increased imports and negatively impacted the GDP calculation.
The eurozone will also release a preliminary estimate of GDP growth for the second quarter. In addition, fresh indices of business and consumer sentiment will be published.
Adidas, Airbus, Alibaba, Arm, Carvana, Danone, Ford Motor, Hermes, Hershey, HSBC, Kraft Heinz, Mercedes Benz, Meta Platforms, Microsoft, Prada, Rio Tinto, Qualcomm and Robinhood will report their quarterly earnings.
On Thursday, July 31, the BEA will release the Personal Consumption Expenditures (PCE) price index for June. Wall Street expects a 2.5% year-over-year increase (up 0.2 percentage points from May). The Core PCE reading, which excludes food and energy prices, is forecast at 2.7%, the same as a month earlier, reports Yahoo Finance.
The Bank of Japan will summarize the results of the interest rate meeting. The market expects the regulator to keep the rate at 0.5% per annum. Although the U.S.-Japan trade agreement has reduced economic uncertainty, the regulator is likely to choose a wait-and-see tactic to assess the effect of the duties, notes WSJ.
Quarterly earnings will be reported by AbbVie, Amazon, Anheuser-Busch InBev, Apple, BMW, British American Tobacco, Coinbase, Ferrari, Lufthansa, Mastercard, Norwegian Cruise Line Holdings, PG&E, Reddit, Rolls-Royce, Samsung, Shell, Strategy and Toyota Motor.
On Friday, August 1, the BLS will release the July employment report. The consensus forecast from economists is for a 106,000 increase in nonfarm payroll jobs after a 147,000 increase in June. The unemployment rate is expected to rise to 4.2% from 4.1%. Like the inflation statistics from the BEA, the BLS labor market report is directly related to the Fed's dual mandate of price stability and maximum employment, stresses Barron's.
Chevron, ConocoPhillips, Exxon Mobil and Moderna will report quarterly results.
This article was AI-translated and verified by a human editor
