Fed Leads Central Bank Parade This Week
This week, all eyes are on central banks, with key policy meetings from the Federal Reserve, the Bank of England, and the Bank of Japan.
Federal Reserve Meeting The Fed wraps up its July policy meeting on Wednesday. It’s expected to keep its benchmark overnight interest rate steady at 5.25%-5.50%. Market expectations lean heavily towards a rate cut in September, following signs of cooling inflation from the latest personal consumption expenditures (PCE) price index. Fed Chair Jerome Powell’s statement will be closely scrutinized for hints about a future rate cut.
Bank of Japan Meeting The Bank of Japan concludes its meeting on Wednesday as well. There’s growing speculation about a potential rate hike despite economic fragility and weak consumer sentiment.
Bank of England Meeting The Bank of England meets on Thursday with uncertainty over its next move. The Monetary Policy Committee’s decision is finely balanced, considering high service price inflation and weak growth.
Futures Rise Ahead of Fed Meeting, Earnings U.S. stock futures edged higher Monday, with the Dow futures up 0.2%, S&P 500 futures up 0.2%, and Nasdaq 100 futures up 0.4%. Last week saw a decline in major indices, especially the Nasdaq Composite due to a tech trade cooldown. Big Tech earnings reports from Microsoft, Meta, Apple, and Amazon are due this week, which could impact market sentiment.
Apple’s AI Plans Delayed Apple’s (NASDAQ
) AI features, Apple Intelligence, will not be included in the initial software updates for iPhones and iPads in September, but are expected in the October updates. The company aims to offset slowing iPhone sales with these new AI features. Apple reports its June quarter earnings this week, with expectations of continued decline in device sales.
Heineken Writes Down Chinese Investment’s Value Heineken’s (AS
) shares fell 7% after missing half-year estimates and announcing a significant write-down of its 40% stake in China Resources Beer. However, Heineken raised its full-year profit guidance. Philips (AS
) shares rose 10% following better-than-expected second-quarter results. Pearson (LON
) shares dropped 3.5% due to lower pretax profit, despite meeting full-year expectations.
Crude Gains on Raised Middle East Tensions Crude prices increased on Monday due to heightened tensions in the Middle East after a rocket strike in the Israeli-occupied Golan Heights. Israel plans to retaliate against Hezbollah, adding to regional instability. Despite the rise, crude demand outlook remains weak.
Market Highlights
- McDonald’s reported a revenue miss, signaling reduced consumer spending.
- Starbucks earnings will be closely watched for trends in consumer behavior.
- Look for potential buying opportunities in LEAPS after these reports.
Stay tuned for more updates and insights.
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