This week in the US, the spotlight is on the Federal Reserve’s interest rate verdict and the subsequent Federal Open Market Committee (FOMC) press briefing. Markets anticipate the Fed to hold the federal funds rate steady at 5.25%-5.50%, marking the eighth successive instance. The focal point, however, will be on any hints regarding the Fed’s strategy for September, with expectations of a rate reduction already factored in by investors.
A suite of economic reports is slated for release, including the Job Openings and Labor Turnover Survey (JOLTs) job vacancies for June, ADP’s employment change for July, and the pivotal nonfarm payrolls alongside the unemployment figures for July. Additionally, the Conference Board (CB) Consumer Confidence index, Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI), June’s factory orders, the S&P Case-Shiller Home Price Index for May, the Federal Housing Finance Agency (FHFA) house price index, and pending home sales for June will provide further insights into the economic landscape.
The ISM Manufacturing PMI is projected to reflect a persistent downturn in the manufacturing domain for the third consecutive month, with a forecasted index of 48.8, just shy of the pivotal 50 threshold delineating growth from decline. Market consensus also points to an addition of 200,000 jobs, with average hourly wages expected to hold at an annual increase of 3.9% and the unemployment rate projected to remain unchanged at 4.1%.
As earnings season forges ahead, financial disclosures from tech behemoths and industry leaders such as Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), Meta Platforms, Inc. (NASDAQ: META), McDonald’s Corporation (NYSE: MCD), Procter & Gamble Co. (NYSE: PG), Merck & Co., Inc. (NYSE: MRK), Advanced Micro Devices, Inc. (NASDAQ: AMD), Pfizer Inc. (NYSE: PFE), S&P Global Inc. (NYSE: SPGI), Stryker Corporation (NYSE: SYK), Mastercard Inc. (NYSE: MA), T-Mobile US Inc. (NASDAQ: TMUS), Qualcomm Inc. (NASDAQ: QCOM), The Boeing Company (NYSE: BA), Intel Corporation (NASDAQ: INTC), Exxon Mobil Corporation (NYSE: XOM), and Chevron Corporation (NYSE: CVX) are eagerly awaited.
Notably, there has been a rotation in equities, with the S&P 500 dipping by about 1% while mid and small-cap stocks saw an uptick of 2-4% last week. This rotation into small and mid-cap equities could signal a shift in investor focus, giving prominence to the earnings reports of these entities in the upcoming period.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
