| What we're watching | | 📉 Stock pullback: Stocks pulled back from record highs amid pressure across the technology sector after a global tech outage sent shockwaves throughout the market on Friday.
The S&P 500 ended the week down nearly 2% while the Nasdaq Composite dropped more than 3.5% on the week. Both indexes had their worst weekly performance since April. Meanwhile, the Dow Jones Industrial Average rose about 0.7%.
This week, critical readings on economic growth and inflation, as well as the start of Big Tech earnings, will determine if the malaise continues.
Joining these narratives is the latest wrinkle in the 2024 presidential election: the news that President Biden is abandoning his campaign and endorsing Vice President Kamala Harris as the Democratic nominee.
🏷️ Inflation outlook: Last week, new data showing a slowdown in inflation prompted markets to put the chances that the Federal Reserve cuts rates by the end of its September meeting at 100%.
The week ahead will bring another look at inflation, this time with the Fed's preferred gauge: The Personal Consumption Expenditures (PCE) index. Due out on Friday, economists expect "core" PCE increased 2.5% in June from the previous year, down from May's 2.6% annual gain. Over the prior month, economists expect "core" PCE rose 0.2%, slightly above May's 0.1% increase.
The release comes less than a week before the Fed's next monetary policy decision on July 31. Markets are widely expecting the central bank to hold interest rates steady.
📈 Growth check: One key question on investors' minds is whether the economy can remain resilient with rates still at their most restrictive levels in more than two decades.
Thursday will bring the first reading of Gross Domestic Product (GDP) for the second quarter. Economists expect the US economy grew at an annualized pace of 1.9% in the second quarter, up from the 1.4% growth rate seen in the first quarter.
Bank of America Securities head of economics Michael Gapen summed up expectations for the upcoming week's data release in a weekly note, writing," The data should show healthy activity, and that inflation is moving in the right direction." |
|  | |
|
|
| Earnings and economic calendar | | Monday
- Economic data: Chicago Fed Nat Activity Index, June (-0.06 expected, +0.18 prior)
- Earnings: Cleveland Cliffs (CLF), Nucor (NUE), SAP (SAP), Truist (TFC), Verizon (VZ), Zions Bancorporation (ZION)
Tuesday
- Economic data: Richmond Fed Manufacturing Index, July (-7 expected, -10 prior); Existing home sales month-over-month, June (-2.7% expected, -0.7% previously)
- Earnings: Alphabet (GOOG, GOOGL), Cal-Maine Foods (CALM), Capital One (COF), Comcast (CMCSA), Enphase (ENPH), Freeport-McMoRan (FCX), GE Aerospace (GE), General Motors (GM), Lockheed Martin (LMT), Phillip Morris International (PM), Spotify (SPOT), Tesla (TSLA), UPS (UPS), Texas Instruments (TXN), Visa (V)
Wednesday
- Economic data: MBA Mortgage Applications, week ending July 19 (+3.9% prior); S&P Global US manufacturing PMI, July, preliminary (51.4 expected, 51.6 previously); S&P Global US services PMI, July, preliminary (55 expected, 55.3 previously); S&P Global US composite PMI, July, preliminary (54.8 previously); New home sales, month-over-month, June (+3.8% expected, -11.3% previously)
- Earnings: AT&T (T), Chipotle (CMG), Ford (F), IBM (IBM), General Dynamics (GD), Lamb Weston (LW), Las Vegas Sands (LVS), ServiceNow (NOW), Viking Therapeutics (VKTX), Waste Management (WM), Whirlpool (WHR)
Thursday
- Economic data: Second quarter GDP, advance estimate (+1.9% annualized rate expected, +1.4% previously); First quarter personal consumption, advance estimate (+1.7% expected, 1.5% previously); Initial jobless claims, week ended, July 20 (243,000 previously); Durable goods, June preliminary (+0.5% expected, +0.1% previously)
- Earnings: American Airlines (AAL), AstraZeneca (AZN), Boston Beer (SAM), Deckers (DECK), Hasbro (HAS), Honeywell (HON), Juniper Networks (JNPR), Keurig Dr. Pepper (KDP), New York Community Bancorp (NYCB), RTX (RTX), Skechers (SKX), Southwest (LUV), Texas Roadhouse (TXRH), Valero (VLO)
Friday
- Economic data: Personal income, month-over-month, June (+0.4% expected, +0.5% previously); Personal spending, month-over-month, June (+0.3% expected, +0.2% previously); PCE inflation, month-over-month, June (+0.1% expected, 0% previously); PCE inflation, year-over-year, June (+2.5% expected, +2.6% previously); "Core" PCE, month-over-month, June (+0.2% expected, +0.1% previously); "Core" PCE, year-over-year, June (+2.5% expected; +2.6% previously); University of Michigan consumer sentiment, July, final reading (66.3 expected, 66 previously)
- Earnings: 3M (MMM), Bristol Myers Squibb (BMY), Colgate-Palmolive (CL), Charter Communications (CHTR)
|
| |
|
|
