Weekly Outlook, 26 – 30 July

FOMC and Tech Giants Earnings! 

By: Ahura Chalki

Market analyst – IFC Markets

We are welcoming the new week, while last week, most stocks closed at their historical highs. And more interestingly, in the week ahead, we have both FED interest rate decisions and Tech Giants’ earnings reports altogether! Besides these massive events, we have heavy economic data; it will be a crazy week. Let’s take a quick look at the most important events of the week ahead. 

Tech Giants in the spotlight. 

All market eyes will be on the earnings reports in the week ahead as it is entering its hottest days. In the week early, Tesla on Monday will start the week. Then on Tuesday, Apple, Microsoft, and Alphabet will report before the Facebook report on Wednesday and Amazon on Thursday. Of course, we have many other market elders, like Visa card, General Motors, Macdonald, Boeing as well, that we need to observe them.

EARNINGS

Germany IFO Business Confidence – Monday

As we saw in June numbers, for July also e are expecting that upbeat data to continue the way and confirm that german’s economy is healthy. As the Faster spreading of the Delta variant of Covid-19, and the latest worries about the economic recovery path and while in June the German IFO business activities hit the two-years highest level, now there are some worries also there and these worries telling us that Manufacturing activities can still be positive, but service sector can be under pressure. These data are expected to support the current bulls of German DAX.  

DAX

FOMC Interest Rate Decision and Press Conference – Wednesday

FED will finish its two-day meeting on Wednesday. Given the weaknesses in recently released economic data, many analysts predict that FED will have a clear plan before its annual conference in Jackson Hole, Wyoming; we do not expect any change in policy, rates, and asset purchasing amount in this meeting. If so, the current bull market will continue its way, but with more caution! Last week Nasdaq and SP500 both printed new records, and still, the trend is getting enough support to continue its path. 

SP500

GDP in US, Germany, and Canada, Thursday & Friday

Fro the US, we are waiting for the fourth consecutive expansion. Developed economies have managed to rebound fastly in the second quarter, comparing their free fall in the second quarter of 2020. Still, in Germany and Canada, it must be the first quarter in the past year to see the positive GDP numbers, primarily thanks to the Manufacturing sectors and increasing personal consumption. These positive data are supposed to help the energy market once more, especially after last week’s free fall. 

Croude Oil

US Personal Spending and Income – Friday

Last month’s published data confirmed the FED’s “transitory” comments about inflation, as it was down to 0.5% from 0.7% of the month earlier. This week for the FOMC’s preferred measure of the state of price inflation will be watched closely, especially with the increase in the retail sales numbers in June; we are waiting to see the growth in Personal spending numbers. However, as the increase in retail sales has been patchy, the increase in Personal income and Spending also does not seem to be seeing much growth. Giving these data and estimates, US dollar index’ bulls will be limited around these levels, as the market cannot count too much on FED’s earlier Hawkish plans.


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