Wochenausblick: Bereiten Sie sich auf die Flut der Q3-Geschäftsberichte vor

Wall Street wird diese Woche vor lauter Quartalsberichten brummen, da es diese Woche mit der Q3-Earnings-Season ernst wird. Auf der Zahlenseite erwarten uns die US-VPI-Zahlen, sowie ein Blick hinter die Kulissen der Fed mit den jüngsten FOMC-Sitzungsprotokollen.

Wichtige Inflations-Metrik mit US-VPI-Bericht

Zuerst steht die Veröffentlichung des Verpraucherpreisindex-Bericht am Mittwoch an, der die Inflation in den USA bemisst.

Nach der Veröffentlichung der August-Zahlen im September halten sich Jerome Powell und seine Kollegen an das bekannte Drehbuch: dass all diese hohe Inflation nur vorübergehend ist. Werden die Zahlen am Mittwoch das untermauern?

Im Vergleich zeigte der letzte, im September veröffentlichte VPI-Bericht eine kleine Abkühlung im August. Die zugrundeliegenden Preise stiegen am langsamsten seit 6 Monaten. Insgesamt stieg der VPI 0,3% nachdem er im Juli bereits 0,5% zugelegt hatte. In den 12 Monaten bis August stieg der VPI 5,3%, nachdem er im Jahresvergleich für Juli um 5,4% in die Höhe geschossen war.

Einige Fed-Mitglieder sind aber nicht besorgt.

„Ich kann mir gut vorstellen, dass dies vorübergehend erhöhte Preise sind, die auch wieder sinken werden, wenn Lieferengpässe behoben sind“, sagte der Präsident der Chicagoer Fed, Charles Evans, gegenüber CNBC. „Ich glaube es könnte länger dauern als wir erwarten, definitiv, da habe ich keine Zweifel. Aber ich glaube, dass die weitere Anstieg dieser Preise unwahrscheinlich ist.“

Treibstoffpreise steigen aber. Öl und Gas schossen letzte Woche in die Höhe. Höhere Ölpreise deuten im Allgemeinen auf höhere Input- und Transportkosten in mehreren Sektoren hin, die dann auf den Verbraucher abgewälzt werden können, was zu allgemein höheren Preisen führt. Vor dem Hintergrund könnten sich die höheren Energiepreise und ihre Auswirkungen deutlicher im VPI-Bericht des nächsten Monats hervortreten anstatt dem vom Mittwoch.

Sitzungsprotokolle des FOMC-Treffens könnten Einblicke ins Denken der Fed geben

Mittwoche sehen wir auch die Veröffentlichung des FOMC-Sitzungsprotokolle für das Treffen im September.

Wir wissen mittlerweile alle was kommt: Zinsen bleiben niedrig; Zurücknahme kommt bald.

Wir wissen aber auch, dass die Falken unter den Fed-Mitgliedern mit früher als erwarteten Zinserhöhungen rechnen. Es gibt das Gefühl, dass ein Anstieg der Zinsen im nächsten Jahr kommen könnte.

Der Vorsitzende Powell stimmte bei denen mit ein, die vor dem Nicht-Anheben der Schuldenbremse warnten. Finanzministerin Janet Yellen warnte Ende September, dass der US-Regierung das Geld ausgehen könnte, wenn nichts unternommen wird.

Die Nichtbedienung der US-Schulden würde Powell zufolge der US-Wirtschaft „deutliche Schäden“ zufügen. Präsident Biden hat angedeutet, dass ein Anstieg der Staatsschulden möglich ist, sodass die Krise vielleicht noch abgewendet werden kann.

Was die Steuerung der Wirtschaft angeht ist aber wahrscheinlich die Rücknahme die große Maßnahme. Man glaubt, dass die Fed ihre Unterstützung schrittweise zurücknehmen wird, bis sie bis Ende 2022 komplett zurückgenommen ist.

Es ist ein starkes Zeichen, dass die USA schnell zur wirtschaftlichen Normalität zurückkehren wollen. Aber die Bedrohung durch neue COVID-19-Varianten steht immer noch im Raum. Man kann nur hoffen, dass 2022 keine neue Delta-Variante zu einer Welle neuer Lockdowns führt oder die Fed steht im Regen.

Die Earning Season ist wieder hier

Gehen wir zur Wall Street. Wir stehen kurz vor Veröffentlichung der Gewinne des dritten Quartals von den ganz Großen, da diese Woche wieder die Earnings Season beginnt.

Wie immer beginnen wir mit den großen Investitionsbanken, die im Q2 wunderschöne Wachstumszahlen verzeichnet haben. Wird der Trend anhalten? JPMorgan, Wells Fargo, Citigroup, Goldman Sachs und andere bringen den Ball dieses Quartal ins Rollen. Der erste Geschäftsbericht kommt am Mittwoch von JP.

Obwohl es so aussieht als ob sich das Wachstum vom sehr guten zweiten Quartal 2021 verlangsamt, könnte uns immer noch ein sehr leistungsstarkes Quartal erwarten. Die US-Finanzdatengruppe FactSet prognostiziert für S&P500-Unternehmen ein Gewinnwachstum von 27,6% im dritten Quartal – die dritthöchste Jahresgewinnwachstumsrate des Index seit 2010.

Im Q3 gibt es auch noch Lieferengpässe. Es gab sie in der ersten Jahreshälfte, aber mit dem Anstieg der Preise von Rohmaterialien und Energie könnten wir eine Verlangsamung der Ergebnisse sehen.

Apple und Konsorten haben zwar gewarnt, dass sich das Absatzwachstum gegen Ende des Jahres verlangsamen könnte, aber lassen Sie uns mal abwarten, was passiert.

Unser Kalender für die US-Earnings-Season hält Sie auf dem Laufenden, welche Mega Caps wann melden, damit Sie Ihre Trades basierend auf den Gewinnberichten dieses Quartals planen können. Unten finden Sie eine Übersicht über die Unternehmen, die diese Woche ihre Geschäftsberichte veröffentlichen.

Vigtige økonomiske data

Date  Time (GMT+1  Asset  Event 
Tue Oct-12  10:00am  EUR  ZEW Economic Sentiment 
  10:00am  EUR  German ZEW Economic Sentiment 
  3:00pm  USD  JOLTS Job Openings 
       
  6:01pm  USD  10-y Bond Auction 
Wed Oct-13  1:30pm  USD  CPI m/m 
  1:30pm  USD  Core CPI m/m 
  6:01pm  USD  30-y Bond Auction 
  7:00pm  USD  FOMC Meeting Minutes 
       
Thu Oct-14  1:30am  AUD  Employment Change 
  1:30am  AUD  Unemployment Rate 
  1:30pm  USD  PPI m/m 
  1:30pm  USD  Core PPI m/m 
  1:30pm  USD  Unemployment Claims 
  4:00pm  USD  Crude Oil Inventories 
       
Fri Oct-15  1:30pm  USD  Core Retail Sales m/m 
  1:30pm  USD  Retail Sales m/m 
  1:30pm  USD  Empire State Manufacturing Index 
  3:00pm  USD  Prelim UoM Consumer Sentiment 
  Tentative  USD  Treasury Currency Report 

 

Key earnings data 

Wed 13 Oct  Thu 14 Oct  Fri 15 Oct 
JPMorgan Chase & Co (JPM) PMO  Bank of America Corp (BAC) PMO  Goldman Sachs Group Inc (GS) PMO 
     
Wells Fargo & Co (WFC) E  Citigroup Inc (C) PMO  Goldman Sachs Group Inc (GS) PMO 
     
  Morgan Stanley (MS) PMO   

 

Ugen der kommer: En ny måned bringer en frisk nonfarm payrolls report (ansættelsesstatistik) for USA.

En ny måned bringer en frisk nonfarm payrolls report (ansættelsesstatistik) for USA. Markederne vil håbe at Augusts store skud forbi bare var en enlig svale. Australiens og New Zealands centralbanker forbereder store udmeldinger imens OPEC+ forsamles til politiske forhandlinger i oktober.

Aftrappende kvantitative lempelser eller ej, er den nye ansættelsesstatistik vigtig for USA.

Markederne vil se om der sker en kovending på det amerikanske arbejdsmarked efter augusts tal skuffede fælt. Stigningen i antallet af NFPs (ikke-landbrugspersonel) var blot 275.000, langt fra markedets forventninger om 750.000.

Arbejdsløsheden faldt en tand til 5,2% imens arbejdsmarkedsdeltagelsen var uændret ved 61,7%. Timelønnen steg 0,6% i August, noget mere end markedets forudsigelser om en stigning på 0,3%.

Vi ved at Jerome Powell og “the Fed” elsker en stærk ansættelsesstatistik. Vi ved også, at uanset hvad septembers data bringer kommer en aftrapning – formentlig i november. Hvis denne fredags rapport virkelig er chokerende, kan det dog forstyrre the Fed’s planer for aftapning, men alle indikatorer viser at vi styrer mod aftrapning snart.

Fed-formand Powell tror dog stadig at USA er langt fra den beskæftigelse, som han ønsker.

I sidste uge udtalte Powell følgende: “Det jeg sagde i sidste uge var, at vi var lige ved at have nået kravet for aftrapning. Jeg gjorde det klart, at vi i min optik er langt fra fuld beskæftigelse.”

Hvornår kommer det? Ifølge en nylig spørgeundersøgelse foretaget af USAs nationale forening af erhvervsøkonomer, tror 67% af deltagende økonomer at beskæftigelsen vil nå sit før-Corona niveau ved slutningen af 2022. Lige under en tredjedel forventer at genopretningen af arbejdsmarkedet først sker i 2023.

Der er en lang, hård vej tilbage til normalen. Vi har dog i flere tilfælde i 2021 set en stigning i ansættelsen efter en tidligere, skuffende måned.

Stigningen fra januar til februar så f.eks. en ændring fra -306.000 ikke-landbrugsansatte til +233.000. Mellem april og maj 2021 var ændringen fra 269.000 til 614.000. Der er altså en præcedens her.

Flere end 7,5 mio. amerikanere har også fået stoppet deres Corona-relaterede kontanthjælp. $300-ekstrabetalinger blev afsluttet først i september da regeringen er begyndt at nedskalere støtten. Kunne dette være katalysatoren for øget beskæftigelse? Det ser vi måske i fredagens ansættelsesstatistik.

Udenfor USA er begge de store oceaniske centralbanker sat til at opdatere deres renter i denne uge.

Vi begynder med Australien, hvor nationalbankdirektør Philip Lowe og hans kollegaer lod til at bevæge sig i retning af en mere fleksibel pengepolitik ved septembers møde i Reserve Bank of Australia. Som sådan forventer markedet ikke nogen drastiske ændringer i oktober.

Vi så renterne forblive på samme lave niveau i Australien som i de forgangne 18 måneder. Den australske nationalbank forbliver stålsat på ikke at hæve sin udlånsrente indtil “den faktiske inflation holder sig stabilt ved målsætningen på mellem 2 og 3 procent”.

Septembers udmelding afslørede dog nogle nuancerede ændringer.

Den korte- og tre-årige udlånsrente forblev begge på 0,1%, men obligationsopkøbsprogrammets aftrapning blev dog justeret. Oprindeligt skulle det senest genovervejes i november, efter en nedjustering til 4 mia. AU$ pr. uge i juli. Nu vil det forblive på samme niveau frem til tidligst februar 2022.

Dette betyder at tempoet på RBA’s aktivopkøb ikke vil falde før næste februar. Efter mødet i juli, troede man at nationalbanken ville genoverveje obligationsopkøbet hver tre måneder for så at udfase det helt i løbet af året. For nu ser det ikke ud til at blive tilfældet.

Vi forventer dog stadig ingen overraskelser når RBA leverer sin renteudmelding for oktober tirsdag morgen.

Markederne forventede måske mere aggressive bevægelser fra Reserve Bank of New Zealand – men nylige kommentarer fra vicedirektør Christian Hawksby antyder at snak om en større stigning i udlånsrenten er forhastet.

“Globalt følger nationalbanker en jævn vej og holder deres renter uændrede eller foretager ændringer med 0,25 procentpoint,” sagde Hawksby, og afsluttede derved alle tanker om en mulig ændring af New Zealands kortfristede udlånsrente (aktuelt 0,25%) på 0,5 procentpoint.

I stedet vil renten sandsynligvis stige i trin, før den når 1,5% ultimo 2022.

Som altid er der dog en stor COVID-19 skygge over New Zealands finanspolitik. Landet gik for nylig tilbage til nedlukning efter en stigning i tilfælde af deltavarianten. Selv om sygdommen viser sig igen, kan det lille antal tilfælde have været nok til at give RBNZ et chok.

Ifølge Reuters har markederne prissat en 60% ændring af chancen for en rentestigning på onsdag når direktør Orr taler.

Afslutningsvis mødes OPEC og deres allierede til deres månedlige forsamling og politikdiskussion på mandag.

Med høje priser og efterspørgslen ligeså, vil vi formentlig se en blåstempling af en stigning i produktionen. OPEC+ har forpligtet sig til at producere yderligere 400.000 tønder/dag hver måned frem til slutningen af næste år, i sit forsøg på at genvinde pandemirelaterede tab.

Ifølge septembers månedlige oliemarkedsrapport, forventer OPEC+ at efterspørgslen vil overstige 2019-niveauet ved udgangen af 2022.

Prisen på Brent crude sniger sig i skrivende stund op imod $80, og det får alarmklokkerne til at ringe i USA. USA har historisk haft billigere brændstof end mange andre I-lande og alt der kan udfordre det er uacceptabelt hos både almindelige amerikanere og Joe Biden.

Præsidenten siger at USA har OPEC i tale vedrørende en yderligere stigning i volumen for at dække dette – og han ignorerer måske det faktum at amerikansk shale er klar til at tilføre mindst 800.000 tønder/dag til det globale udbud når først det kommer i gang.

OPEC+ er alligevel mest sin egen. Alt det gør er for at tjene sine medlemmer, allierede og olieprisen i hele verden. Om Bidens ønsker falder på døve øren vides ikke, men jeg ville ikke blive overrasket over at se OPEC-JMMC holde sig til sin egen agenda i oktober og frem i tiden.

Vigtige økonomiske data

Date  Time (GMT+1)  Asset  Event 
Mon 04-Oct  All Day  OIL  OPEC-JMMC Meetings 
       
Tue 05-Oct  4.30am  AUD  RBA Rate Statement 
  4.30am  AUD  Cash Rate 
  3.00pm  USD  ISM Services PMI 
       
Wed 06-Oct  2.00am  NZD  Official Cash Rate 
  2.00am  NZD  RBNZ Rate Statement 
  1.15pm  USD  ADP Nonfarm Employment Change 
  3.30pm  OIL  US Crude Oil Inventories 
       
Thu 07-Oct  3.30pm  GAS  US Natural Gas Inventories 
       
Fri 08-Oct  1.30pm  CAD  Employment Change 
  1.30pm  CAD  Unemployment Rate 
  1.30pm  USD  Average Hourly Earnings m/m 
  1.30pm  USD  Nonfarm Employment Change 
  1.30pm  USD  Unemployment Rate 
  Tentative  USD  Treasury Currency Report 

Week ahead: US PCE data to nudge Fed tapering?

On the agenda this week: We bid farewell to Angela Merkel as Germany faces a future without her leadership for the first time in over a decade. We’ve also a range of big data releases from the US including the Fed’s preferred inflation metric – and Canadian GDP stats. Will it backslide again? 

We all know the Fed loves PCE data. Personal Consumption Expenditures is its favourite inflation metric – and one that could force that ever-discussed tapering through earlier, depending on August’s print. 

The broad market consensus is that the Fed will begin pulling back its economic support in either November or December, so the question now is one of liftoff for rates. The Fed has already raised its core CPE inflation forecast for 2021 to 3.7% from 3% in June – they know it’s hot. Chair Powell has also pretty much announced that the Fed will start tapering this year. The question now is whether the Fed has to revise these expectations still higher, and what that might mean for the path of interest rate hikes. An expectation-beating print this week would stoke concerns that this is the case. 

Of course, there are other external factors at play. It should also be pointed that July’s 0.4% jump was in line with expectations and showed a cooling off against June’s figures. 

In July, the overall rate of inflation reached 4.2%. Going by the Consumer Price Index data reported recently, the cost of consumer goods rose 5.3% in August. This was in line with expectations. It may also be an indicator of where PCE data is headed.  

The Fed is on record as saying its content to let inflation run above its 2% target as it considers the current high levels as “transitionary”.  

The United States, like pretty much all major economies, is moving out of the pandemic economy and attempting to find some semblance of normality. It could be the case that hot inflation continues to singe the economy before burning out in 2022 and fading away. 

The latest PCE reading comes on Friday. 

Tethered to this is US consumer confidence. Logically, higher prices suggest a lowering in consumer sentiment. This has been reflected in August’s data, and it may be the case when we get September’s data on Tuesday afternoon. 

In August, consumer confidence dropped to a six-month low. The Conference Board’s index fell to 113.8 from a revised 125.1 reading in July.  

“Concerns about the Delta variant — and, to a lesser degree, rising gas and food prices — resulted in a less favourable view of current economic conditions and short-term growth prospects,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement, explaining the dip. 

Over 39 million COVID-19 cases have been recorded in the US across the course of the pandemic so far. 

Moving away from the US, Germany closes the book on Angela Merkel’s tenure as Chancellor. After 16 years, Merkel is stepping aside, which gives today’s elections an air of exciting new change. 

By the end of play today, Germany will have a brand-new Chancellor. SPD leader Olaf Scholz was the front runner in the build-up to election, outstripping rivals from the CDU and the Greens. 

That said, the belief is the Greens, who were on course to their best-ever results prior to Germans hitting the polls, may become the SPD’s chief partner in a brand-new coalition. 

Our macroeconomics and political guru Helen Thomas previewed Germany’s latest federal elections. Have her predictions been proved correct?  

Speaking of elections, Canadians recently voted in a fresh wave of political changes, with PM Trudeau holding onto the reins for a third term. The Liberals’ majority was compromised – which could make the nation’s economic moves interest. 

Canada’s month-on-month GDP figures are released this month, following a 1.1% contraction. Estimates called for 2.5% growth, so even with the snap election keeping Trudeau in power, the same challenges he was facing before are his same challenges once again. 

Economic recovery will “continue to require the same extraordinary level of support”, according to Bank of Canada Governor Tiff Macklem. No changes to economic policy are expected – despite the lacklustre GDP showing from last month. Perhaps we’ll see a reversal this month, or a possible muddying of the waters caused by election fervour.  

Major economic data 

Date  Time (GMT+1)  Asset  Event 
Sun 26-Sep  All Day  EUR  German Federal Elections 
       
Tue 28-Sep  2.30am  AUD  Core Retail Sales m/m 
  3.00pm  USD  CB Consumer Confidence 
       
Wed 29-Sep  3.30pm  OIL  US Crude Oil Inventories 
       
Thu 30-Sep  2.00am  CNH  China Manufacturing PMI 
  1.30pm  CAD  GDP m/m 
       
Fri 01-Oct  8.55am  EUR  German Final Manufactuing PMI 
  1.30pm  USD  Core PCE Index m/m 
  3.00pm  USD  ISM Manufacturing PMI 

 

Week Ahead: Central banks take centre stage

The week ahead is dominated by central bank statements. We’ve got three lined up, with the first coming from the ECB. Its dovish outlook runs counter to the Reserve Bank of Australia and Bank of Canada who’ve taken on a more hawkish character of late. We’re not expecting major policy shifts – but surprises are never far away in the world of economics. 

The last glimpse inside the European Central Bank’s thinking we got came in the form of its July meeting minutes. In a world where central banks are starting to take more hawkish footings, the ECB is still relatively dovish. 

The ECB announced its first major strategic financial policy in July. Inflation targets were revised away from trying to keep it below 2% by adopting a specific 2% headline inflation target. Since then, inflation in the Euro area has risen to a decade high of 3%, which is likely to encourage hawks on the Governing Council.  

All very well and good, but what about COVID-19? The pandemic is by no means over, but some key ECB board members are confident even the impact of the Delta variant can’t stunt Europe’s return to the black. 

Limited headwinds are expected. The sentiment is positive. 

“I would say we’re broadly not too far away from what we expected in June for the full year,” Philip Lane, the ECB’s chief economist, told Reuters on Wednesday. “It’s a reasonably well-balanced picture.” 

Importantly, the ECB has said it will keep a “persistently accommodative” stance going forward. Interest rates are likely to stay at their current exceptionally low levels. We’re not expecting to see a shift towards a more hawkish position any time soon. 

Moving to Australia, the RBA has been fairly bullish in its most recent communications. A new rate statement will come the Reserve Bank of Australia on Tuesday morning and we’re not expecting the bank to stray too far from its current course. 

That is to say, tapering of the RBA’s bond buying programme will continue with the aim of scaling it back from September onwards. Rates will probably stay low too. We’re not expecting a hike until late 2022 at the earliest. 

Much depends on how robust Australia’s economy fares in light of rising coronavirus cases and localised lockdowns.  

“The board would be prepared to act in response to further bad news on the health front should that lead to a more significant setback for the economic recovery,” the RBA said in its August meeting minutes. “Experience to date had been that, once virus outbreaks were contained, the economy bounced back quickly.” 

Governor Lowe and his colleagues have said a recession is not very likely, although growth prospects have been revised for 2021. This year, the RBA expects annual growth to be around 4%, lower than the 4.75% previously forecast, but will rise to 4.25% by the end of 2022. 

Rounding off the week’s cavalcade of central bank statements is the Bank of Canada. The BOC is one of the more hawkish of the world’s central banks and has moved towards bond-buying tapering quite quickly, even though it is holding its overnight rate at 0.25%. 

The BOC did point out that a fresh wave of infections and lockdowns in Q2 did inhibit growth, but the bank is confident growth will expand rapidly towards the end of the year.  

The central bank said Canada’s economy is now expected to grow 6.0% in 2021, down from the April forecast of 6.5%, while it revised up its 2022 growth estimate to 4.6% from 3.7%. 

Hot inflation is still floating in the air, with readings expected to stay at or above 3% through to 2022. Quite hot – and at the top of the BOC’s 1-3% range. However, the bank is confident this is all transitionary. It is unlikely to force a policy rethink. 

Major economic data 

Date  Time (GMT+1)  Asset  Event 
Tue 7-Sep  5.30am  AUD  RBA Rate Statement 
  5.30am  AUD  Cash Rate 
  10.00am  EUR  ZEW Economic Sentiment 
  10.00am  EUR  German ZEW Economic Sentiment 
       
Wed 8-Sep  3.00pm  CAD  BOC Rate Statement 
  3.00pm  CAD  Ivey PMI 
  3.00pm  CAD  Overnight Rate 
  Tentative  CAD  BOC Press Conference 
       
Thu 9-Sep  12.45pm  EUR  Monetary Policy Statement 
  12.45pm  EUR  Main Referencing Rate 
  1.30pm  EUR  ECB Press Conference 
  1.30pm  USD  Unemployment Claims 
  3.30pm  GAS  US Natural Gas Inventories 
  4.00pm  OIL  US Crude Oil Inventories 
       
Fri 10-Sep  1.30pm  CAD  Employment Change 
  1.30pm  CAD  Unemployment Rate 
  1.30pm  USD  PPI m/m 
  1.30pm  USD  Core PPI m/m 
  Tentative  GBP  Monetary Policy Hearings 

Week ahead: Nonfarm payrolls take the spotlight

It’s all about major economic movers this week. The US jobs report for August is released on Friday, while we kick off the week with the latest Chinese manufacturing PMI numbers. OPEC and allies are due to hold meetings too, making it a busy week for the global economy. 

The US jobs market has taken us to abyssal lows and new dizzying growth heights across the past 18 months. The pandemic has certainly taken its toll, but we’ve seen new life flow through the US’ economic veins too with more workers filling job gaps. 

Just take last month’s nonfarm payrolls. July’s data saw an expectation-smashing 943,000 new jobs added to the economy.  

Friday is when August’s job data is published. Markets of course will be looking at it closely. It’s the big release of the month, after all. But this week’s job’s report takes on a new character given trends we’ve seen in 2021. 

For instance, April’s nonfarm payrolls stood at 785,000 new roles, registering a month-on-month increase of over 200,000. But in May, the NFP report shrank by over 500,000 to 269,000. 

June and July showed consecutive growth months, but it’s important to not get too carried away. We’ve previously seen a bumper report give way to stunted growth in the following month fairly recently.  

The Federal Reserve has explicitly tied policy decisions to labour market health, so this report will be of particular interest in the wake of last week’s Jackson Hole symposium. 

As the start of another month brings another US jobs report so too does it bring another set of OPEC+ meetings. 

Last week WTI and Brent benchmark dropped to 3-month lows, though they have since staged a bit of a rally with Brent crossing over the $70 threshold and WTI pushing over $67. 

Changing demand expectations have weighed on crude prices. Key importers have introduced travel restrictions or new lockdowns. Some Chinese oil ports, for example, have been shuttered as Delta-variant COVID-19 cases rise. 

But OPEC+ has so far stuck to its guns. It’s still committed to upping production by some 400,000 bpd per month from August onwards. It also saw no reason to push those numbers high at the urging of President Biden. For now, 400,000 bpd per month is the level. 

It’s important to reiterate everything OPEC and its allies have done this year has been to support oil prices. With COVID-19 cases mounting worldwide, the supply/demand tightrope the cartel is walking may have narrowed but OPEC+ is likely banking on vaccine rollout to help pick up the slack. 

We all know oil is a key ingredient in economic growth in our current fossil-fuel based worldwide economic system. China is the world’s largest importer of crude, so the nation’s manufacturing output falls under intense scrutiny – especially in the light of potentially lower oil imports in the past couple of months. 

We may be able to see the effects of less oil and a surge in Delta-variant cases across the past month in August’s manufacturing PMI reading. 

July’s reading of 50.4 was the lowest reading for 15 months. June’s 51.3 was a slight bump on May’s 51.0, but the trend seems to be factory output is slowing in the world’s second-largest economy.  

Shutting ports isn’t going to do factory output any favours. Neither will current high commodity prices. Labour shortages and higher input costs have factored into slowdowns in UK and US manufacturing too. This isn’t a localised Chinese phenomenon.  

A PMI reading above indicates that there is still growth, but we’re seeing China perilously close to slipping under that. Tuesday’s PMI release will reveal all. 

Major economic events 

Date  Time (GMT+1)  Asset  Event 
Mon 30-Aug  3.00pm  USD  US Pending House Sales 
       
Tue 31-Aug  2.00am  CNH  Manufacturing PMI 
  1.30pm  CAD  GDP m/m 
  2.45pm  USD  Chicago PMI 
  3.00pm  USD  CB Consumer Confidence 
       
Wed 01-Sep  ALL DAY  OIL  OPEC Meetings 
  ALL DAY  OIL  OPEC-JMMC Meetings 
  2.30am  AUD   GDP m/m 
  8.55am  EUR  German Final Manufacturing PMI 
  1.15pm  USD  ADP Nonfarm Employment Change 
  3.00pm  USD  ISM Manufacturing PMI  
  3.30pm  OIL  US Crude Oil Inventories 
       
Thu 02-Sep  3.30pm  GAS  US Natural Gas Inventories 
       
Fri 03-Sep  1.30pm  USD  US Nonfarm Payrolls 
  1.30pm  USD  Average Hourly Earnings 
  1.30pm  USD  Unemployment Rate 
  3.00pm  USD  ISM Services PMI 
  Tentative  GBP  Monetary Policy Report Hearings 

Week Ahead: All eyes on Jackson Hole

The Jackson Hole Symposium is the big one this week. 

This annual gathering of top US and international finance policymakers, movers, and shakers has long been used to break major policy shifts. Markets are anticipating Fed Chair Jerome Powell will be using this year’s meeting to announce QE and stimulus policy changes. 

Powell could use the Symposium to announce a pullback from its current bond-buying programme. The Fed hinted as much in its July meetings, and there’s been plenty of rumblings that tapering is on the way, but as yet traders and investors are yet to receive an official green light.  

At present, the Fed is currently buying $120bn in fixed-income assets every month. $80bn comes from Treasury securities and the remaining $40bn is sourced from mortgage-backed securities. All of this was part of a package of ideas to help support the COVID-ravaged US economy. 

Bond traders and currency markets in particular are watching Thursday’s get together with interest. Clarity on the economy’s course, and navigational ideas to make it through a Delta-dominated landscape, will do much to allay their fears. It’s up to Powell now. 

Since the start of the year, the economy has been accelerating rapidly – even if last quarter’s GDP growth failed to meet expectations. But rapid rises can bring other challenges. In this case, they’re inflation shaped. CPI and PPI keep growing at record rates too, and while Powell has been content to let the economy run hot, he’d best put on some oven gloves, lest his fingers get burned. 

Speaking of inflation, further data on its impact is on its way with Friday’s release of Personal Consumption Expenditure index numbers, the Fed’s preferred gauge of inflation. 

PCE growth clocked in at 0.4% in July, below the expected 0.6%, but an increase of 3.5% on an annualized basis. Seeing as it has been rapidly rising across the past couple of months, no doubt Powell and co. will be keeping a very close eye on Friday’s print. 

Further economic health indicators are on their way in the shape of a Monday morning PMI blitz. We’ll get releases judging American business output then, as well as IHS Markit insights into British and European activity too.  

US flash PMI readings for manufacturing and service productivity are released on Monday. There will be a lot to unpack when these are published, particularly as July’s numbers reported solid-but-slowing growth in American business activity. 

Both services and manufacturing sectors continue to feel the twin fangs of inflation and COVID-19. Factory output caused the manufacturing index to drop from June’s 63.7 reading to 59.7 in July (a four-month low), while the services sector also pulled back from 64.6 to 59.8.  

Higher input costs, staff shortages, and rising raw material costs are limiting growth. Let’s be clear: a reading over 50 indicates growth, but it does appear there’s a slowdown occurring in American productivity. 

Much the same can be said of the UK, according to its own PMI figures. August’s index readings are published on Monday morning, but we’ve seen supply chain bottlenecks and low worker numbers hold back output.  

July’s IHS Markit UK services PMI score was 59.6, a quite significant drop from June’s 62.4. Manufacturing showed a similar drop to 59.2 from 62.2.  

“More businesses are experiencing growth constraints from supply shortages of labour and materials, while on the demand side we’ve already seen the peak phase of pent-up consumer spending,” said IHS Markit’s economics director, Tim Moore. 

Conversely, EU productivity showed a July surge. IHS Markit’s final composite Purchasing Managers’ Index reached 60.2 in July – the highest level since June 2006 – indicating a strong showing from both services and manufacturing. 

However, to sustain this, the EU will have to be careful to avoid the logistical and labour market snags that have hit the UK and US. It’s unlikely to do so, so we could be looking at a lower reading in August. 

Major economic data 

Date  Time (GMT+1)   Asset  Event 
Mon 23-Aug  8.15am  EUR  French Flash Manufacturing PMI 
  8.15am  EUR  French Flash Services PMI 
  8.30am  EUR  German Flash Manufacturing PMI 
  8.30am  EUR  German Flash Services PMI 
  9.00am  EUR  Flash Manufacturing PMI 
  9.00am  EUR  Flash Services PMI 
  9.30am  GBP  Flash Manufacturing PMI 
  9.30am  GBP  Flash Services PMI 
  2.45pm  USD  Flash Manufacturing PMI 
  2.45pm  USD  Flash Services PMI 
       
Wed 24-Aug  3.30pm  OIL  US Crude Oil Inventories 
       
Thu 25-Aug  ALL DAY  USD  Jackson Hole Symposium 
  1.30pm  USD  Preliminary GDP q/q 
  1.30pm  USD  Unemployment Claims 
       
Fri 26-Aug  ALL DAY  USD  Jackson Hole Symposium 
  1.30pm  USD  Core PCE Price Index m/m 

 

Week ahead: FOMC minutes to lift the veil on Fed’s thinking

This week sees the release of the latest batch of FOMC meeting minutes, giving insight into the Fed’s inner workings. We also get some big data releases. US retail sales are in focus after an unexpected jump in June, as well as latest CPI figures for the UK economy. 

Minutes from July’s FOMC meeting are published this week.  

Things remained pretty much where they started when the Fed met for its monthly two-day meeting last month.  

It did not lift interest rates from their current historically low level, nor did the Fed announce when it planned on altering its $120bn monthly bond-buying programme.  

“Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgagebacked securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals,” said the FOMC in a statement. “Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings.” 

The basic undercurrent is that the economy is recovering, despite rapidly rising Covid-19 case numbers. However, prevailing changes in the economy, resulting from the pandemic, may force Chairman Powell to act quicker than expected. 

We’ve seen core inflation rise in successive CPI prints – but we’ve also seen the employment rate drop too. Last month’s nonfarm payroll print was one of the strongest for years, with 943,000 new jobs added to the US economy. The unemployment rate fell to 5.4% too. 

Job participation is one of the key metrics the Fed is using to gauge the United States’ economic health to make policy adjustments. We’ve already seen some chinwagging suggest that tapering is on the way, so this may supersede the insights we’ll gain on Wednesday’s FOMC minutes release. 

Switching to data, US retail sales figures are released this week. Markets will be looking to see if June’s surprise increase was a one-off or the start of a new trend. 

Core retail sales rose 1.1% and retail sales as a whole grew 0.6% in June, something which markets weren’t expecting. From a year-on-year perspective, sales surged 18% against June’s 2020 levels. 

According to the US Commerce Department cited Covid-19 vaccinations, low interest rates, and huge fiscal stimulus as underpinning retail sales. But, as mentioned above, this was a bit of a shock for US economists. With the US economy reopening, consumer spending was trending more towards experiences and trips, rather than consumer goods. 

In fact, at the last retail data reading, May’s stats were revised down. It was a 1.7% monthly decline in May, rather than the 1.3% originally reported. Again, this was due to the switch from consumer goods to experiences. 

Staying on the data front, July’s UK consumer price index readings come on Wednesday morning.  

June’s print showed a CPI three-year high. At 2.5% in June, up from 2.1% in the previous month, consumer price inflation is now at its highest level since 2018. That may prompt the Bank of England into changing its stance on rate hikes sooner than expected. 

That said, Governor Bailey maintained the UK central bank’s dovish stance at its August meeting, deeming CPI inflation as transitionary. No major tweaks to UK monetary policy were made at this time.  

The Bank of England has adjusted its long-term inflation outlook, however. It now believes inflation will run at 3.1% throughout the next 12 months – up from the 2.8% rate forecast in June. 

Will we see another estimate-beating CPI reading this month – and will this be enough to spur Governor Bailey and co. into action?  

Speaking of central banks, the Reserve Bank of New Zealand gives its August rate statement next week.  

Rumours are flying that the RBNZ could raise rates as early as this month. It’s already committed to removing its QE programme in a move that surprised onlookers in July.  

“Our current expectation is that the RBNZ will hike interest rates in the August Monetary Policy Statement (MPS), followed by a subsequent hike in each MPS till [the] interest rate reaches 1.75% in 2022,” said Finn Robinson, economist at Australia and New Zealand Banking Group (ANZ). 

Currently, New Zealand’s cash rate is 0.25%, the same rate it has been for the past year. 

This is likely a response to rising CPI inflation. July’s print saw New Zealand’s consumer price index rising by 1.3%, bringing total inflation to 3.3%, passing the RBNZ’s 1-3% target. 

If a rate hike is coming, New Zealand would be one of the first, if not the first, country to do so. 

It’s also the final week of this quarter’s earnings season this week. We’re not expecting too many large caps to report in, with Walmart being the largest firm still yet to report, but you can see which companies are sharing their quarterly with our earnings calendar 

Major economic events 

Date  Time (GMT+1)  Asset  Event 
Tue 17-Aug  2.30am  AUD  Monetary Policy Meeting Minutes 
  1.30pm  USD  Core Retail Sales m/m 
  1.30pm  USD  Retail Sales m/m 
       
Wed 18-Aug  3.00am  NZD  Official Cash Rate 
  3.00am  NZD  RBNZ Monetary Policy Statement 
  3.00am  NZD  RBNZ Rate Statement 
  4.00am  NZD  RBNZ Press Conference 
  7.00am  GBP  UK CPI m/m 
  1.30pm  CAD  CPI m/m 
  3.30pm  OIL  US Crude Oil Inventories 
  7.00pm  USD  FOMC Meeting Minutes 
       
Thu 19-Aug  2.30am  AUD  Employment Change 
  2.30am  AUD  Unemployment Rate 
       
Fri 20-Aug  7.00am  GBP  Retail Sales m/m 

 

Key earnings data 

Mon 16 Aug  Tue 17 Aug  Wed 18 Aug 
Roblox Corporation  Walmart   Lumentum Holdings 
 
Cisco Systems 
 
NVIDIA  

 

Week ahead: OPEC+ meets as Delta variant puts pressure on oil markets

OPEC-JMMC August meetings, pushed back after July’s tough negotiations, take place this week. Traders will look to the cartel for a response to potential dents to demand recovery caused by rising Delta variant numbers worldwide.

Elsewhere, UK Q2 GDP figures are released on hopes of strong growth while US CPI inflation is in focus too with July’s stats coming this week.

It’s fair to say July was a bit of a tense month for OPEC and its allies. It will be hoping to avoid further conflicts when it meets on Thursday this week.

The Cartel has been doing its best to not go overboard with production tapering. Given the relative strength of prices, despite last week’s wobble, its efforts to curb output to protect prices have been broadly successful.

Come July’s meeting, fractures began to appear in the OPEC façade. It’s always a balancing act when its members and allies get together in order to weigh each individual member state’s interests. Oil production is an integral part of all their economies after all. In this case, the UAE was pushing hard to lighten restrictions and redress base levels – something which Saudi Arabia was resisting.

That’s all spilt milk under the bridge now. A deal was reached, after delayed and reorganise meetings and hectic negotiations on both sides. The stoppers have been loosened. New baselines were awarded to members, including chief agitator the UAE, at the eventual outcome.

An extra 400,000 bpd will be added to OPEC+ production monthly volumes from August onwards. That should bring production up to about 2m bpd by the end of 2022. OPEC also confirmed it had extended its production cut deal until April 2022.

This month’s meeting, however, takes on a different hue as rising Delta variant COVID cases continue to mount worldwide. That could majorly impact demand recovery, and thus instigate some kind of retooling to OPEC+’s plans going forward.

A slowdown in Chinese manufacturing could also affect OPEC’s thinking. China is the world’s largest crude importer, so if less oil is needed to fuel its factories then prices could drop as markets recalibrate to lowered Chinese crude imports.

Whatever happens, OPEC will no doubt be extremely keen to avoid any fortnight-long negotiations as happened in July. Either way, Thursday’s meetings will be an interesting watch.

This week also sees the publishing of the UK’s preliminary Q2 growth figures.

Strong vaccine rollout coupled with dropping COVID cases are expected to have supported growth in Q2, following the UK’s1.6% contraction in Q1. Higher consumer spending is likely to be the main growth engine, however, accounting for roughly 70% of gross domestic product between May-July.

So, what are the forecasts? The British Chamber of Commerce (BCC) believes Q2 growth will clock in at 4.1% in 2021’s second quarter.

“The UK economy is in a temporary sweet spot with the boost from the release of pent-up demand, if restrictions ease as planned, and ongoing government support expected to drive a substantial summer revival in economic activity, underpinned by the rapid vaccine rollout,” the BCC said in a statement.

Looking long term, overall GDP growth predictions float between the 7-8% mark. The Confederation of British Industry’s forecasts sit at the optimistic end of the scale at 8.1% for the year.

As it stands, however, the UK’s domestic output is still some 8.8% lower than before the pandemic. Long term growth will likely cool with the effects of inflation and lower government support as we move into 2022.

Speaking of inflation, the week’s other key data release is the US consumer price index figures for July.

If the pace of inflation continues, then it will really test the Fed’s resolve. Chairman Powell has committed to the historically low cash rate, and seems content to let the economy run hot, but is this really sustainable?

June’s CPI inflation already caused alarm for some economists. By rising 5.4% year-on-year, the index had risen at its fastest pace since August 2008.

So far, the Fed has characterised inflation as “transitionary” and is still sticking to its dovish outlook. Its data modelling calls for 3% headline inflation by the end of 2021, before falling back to 2.1% in 2022.

Given consumer spending is the US economy’s major growth engine, accounting for roughly 68% of GDP, it’s little wonder why some observers are feeling tetchy and calling for more action. Gross domestic product missed growth expectations in Q1, for instance, as high prices limited consumer spending.

July’s CPI reading may thus be doubly important for the Fed.

It’s a subdued week for earnings on Wall Street, but we still have some large caps reporting. Headliners this week include Walt Disney, Palantir, and Airbnb who all report in on Thursday.

Make sure you check out our US earnings season calendar to see which large caps are still due to share quarterly earnings this week and beyond.

Major economic data

Date Time (GMT+1) Asset Event
Tue 10-Aug 10.00am EUR ZEW Economic Sentiment
10.00am EUR German ZEW Economic Sentiment
Wed 11-Aug 1.30am AUD Westpac Consumer Sentiment
1.30pm USD CPI m/m
1.30pm USD Core CPI m/m
3.30pm OIL US Crude Oil Inventories
Thu 12-Aug ALL DAY OIL OPEC-JMMC Meetings
7.00am GBP Prelim UK GDP
1.30pm USD PPI m/m
1.30pm USD Core PPI m/m
3.30pm GAS Natural Gas

 

Key earnings data

Mon 9 Aug Tue 10 Aug Thu 12 Aug
The Trade Desk (TTD) PMO Coinbase Global (COIN) AMC Palantir Technologies (PLTR) PMO
Viatris (VTRS) PMO Airbnb (ABNB) AMC
Walt Disney (DIS) AMC

Week Ahead: All eyes on US jobs report

A busy week ahead for the markets with the US nonfarm payrolls as the marquee event, as well as two major central bank statements.

Let’s start with the latest US nonfarm payrolls print.

June’s reading performed way above expectations, and the markets will be watching closer than ever when the latest data is released on Friday.

850,000 payrolls were added to the US economy in June – way above the 720,000 forecast. This was also the sixth consecutive month where new additions were made.

However, the unemployment rate rose from 5.8% to 5.9% – higher than the predicted 5.6% rate forecast. Labour force participation, the go-to metric for gauging workforce shortages nationwide rate didn’t budge at 61.6%.

Hiring appears to have dipped a little overall throughout the spring. There are a couple of reasons for this: virus fears; childcare costs; better unemployment insurance; stimulus & furlough schemes. However, it’s been reported that firms have upped wages in order to entice workers into taking new positions.

The employment rate is also an important measure for Fed Chairman Jerome Powell when assessing stimulus and support levels for the US economy.

We know Powell and co. are relatively comfortable about letting the economy run hot, even in the face of rising inflation. As Powell pointed out at the last Fed meeting, there remains a gap of 7.5 million jobs missing from the US economy, although some reports suggest the figure is 6.8m. Until these open positions are filled, expected more Fed stimulus and support.

In terms of indices, the S&P 500 and Nasdaq responded very well to last month’s bumper jobs report, reaching new record highs. Indices traders will be hoping for more of the same with July’s print.

Sticking with US-related data, ISM, one of the key purchasing manager index reporters for the American economy, shares its manufacturing and services outlooks this week.

US manufacturing was still robust last month, according to ISM’s PMI report, but supply chain issues continue to inhibit growth. The factories printing was rated at 60.6 – down from the 61.2 score registered in May.

Momentum is still strong. Four out of the five subindexes rated by ISM showed high growth. Consumer interest in new goods is still high, despite rising prices. But labour shortages, coupled with the rising price of commodities and materials, has caused bottlenecks and shortages as manufacturers struggle to keep up with demand.

“Record-long raw-material lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy,” said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.

The same can be said for the services sector: it expanded in June, but that expansion had softened compared with a best-ever May rating. In this case, the index fell from 63.5 to 60.1.

“The rate of expansion in the services sector remains strong, despite the slight pullback in the rate of growth from the previous month’s all-time high,” explained Chair of the ISM Services Business Survey Committee Anthony Nieves. “Challenges with materials shortages, inflation, logistics and employment resources continue to be an impediment to business conditions.”

Keeping that momentum going is all important for America’s economic health – especially as the US is expected to be the driving force behind the global economic recovery across the rest of this year and beyond.

Moving away from data, a pair of central bank statements are on the way next week.

Starting with the Bank of England, rising inflation is the big one here.

In June, inflation reached 2.5%, thanks to widespread increase in consumer goods. This could just be pent-up demand in the British economy finally being unleashed, but as inflation is now at its highest levels for three years, economists’ nerves may be tested.

Governor Bailey has already made his stance clear: the price jumps are only temporary, and we could see it run as high as 3% by the year’s end. It should then fall away back to acceptable levels after that. Currently, the BoE has a mandate to steer inflation towards 2% and keep it there.

However, Bailey has stated he would be ready to pitch rate hikes should inflation run out of this control.

The Reserve Bank of Australia also shares its latest policy thinking and direction this week.

Chances are, no big changes are coming. Governor Philip Lowe has been very clear that no rate hike will be forthcoming until at least 2024. That’s despite Australia’s strong economic fundamentals.

The historic low cash rate of 0.1% isn’t going anywhere. What’s interesting, however, is that July’s meeting led to some tweaks in Australia’s QE programme. The scale has been pulled back. From September onwards, the rate of RBA bond purchases will slow from AUD$5bn to AUD$4bn per week.

The groundwork for more tweaks to policy has been laid by Governor Lowe. Let’s see what this week’s meeting brings in terms of any small-scale changes.

We can’t finish a preview of the week’s key events without touching on US earnings season.

Week three of large cap earnings reports for Q2 2021 begins on Monday. It’s not as busy as the previous week’s reporting flurry, but we still have some significant reports coming in, namely Alibaba and Uber.

Check out our US earnings calendar for more information on which major firms are sharing earnings reports this week or see below.

Major economic data

Date Time (GMT+1) Asset Event
Mon 2-Aug 8.55am EUR German Final Manufacturing PMI
  3.00pm USD US ISM Manufacturing PMI
 
Tue 3-Aug 5.30am AUD RBA Rate Statement
  5.30am AUD Cash Statement
  11.45pm NZD Employment Change q/q
  11.45pm NZD Unemployment Rate
 
Wed 4-Aug 2.30am AUD Retail Sales m/m
  1.15pm USD ADP Nonfarm Employment Change
  3.00pm USD US ISM Services PMI
  3.30pm OIL US Crude Oil Inventories
 
Thu 5-Aug 12.00pm GBP Asset Purchase Facility
  12.00pm GBP BOE Monetary Policy Report
  12.00pm GBP MPC Asset Purchase Facility Votes
  12.00pm GBP Monetary Policy Summary
  12.00pm GBP MPC Official Bank Rate Votes
  12.00pm GBP Official Bank Rate
  3.30pm GAS US Natural Gas Inventories
 
Fri 6-Aug 2.30am AUD RBA Monetary Policy Statement
  1.30pm CAD Employment Change
  1.30pm CAD Unemployment Rate
  1.30pm USD Average Hourly Earnings q/q
  1.30pm USD Nonfarm Employment Change
  1.30pm USD Unemployment Rate

 

Key earnings data

Mon 2 Aug Tue 3 Aug Wed 4 Aug Thu 5 Aug
Arista Networks Alibaba General Motors Ball Corp
Activision Blizzard The Kraft Heinz Co Beyond Meat
Roku Inc Illumina
Uber Technologies Square Inc
The Trade Desk
Virgin Galactic Holdings

Week Ahead: The Fed meets as inflation bites

The Fed meets as inflation starts to bite into the US economy. Will we see any major changes from Powell and co? US GDP is in focus too with forecasts calling for more record quarterly growth. Meanwhile, Tesla hits the accelerator on the busiest US earnings season week so far this quarter.

Earnings reports aside, the week’s big event is July’s FOMC meeting.

Inflation and a hot-running economy are likely to take centre stage during July’s talks. We’ve recently seen Chairman Powell pledge “powerful support” for the US economy post-pandemic amidst a backdrop of rising inflation.

According to Powell, current rising consumer prices is down to the nation’s reopening and will fade. In a testimony to the US House of Representatives, Powell stuck to the jobs script, pointing out there is still 7.5 million jobs missing from the US’ pre-pandemic economy.

A reduction in stimulus is some way off, according to Powell. The Fed’s $120bn a month bond purchasing programme is probably not going to change. As mentioned above, this is tied in with labour markets. Bond-buying and Fed support will likely remain in place until those job gaps are filled.

No rate hike is expected until 2023 at the earliest.

But for all the Fed’s talk of inflation being broad-based, stemming from heightened economic activity, many remain unconvinced on the plan to let the economy run hot.

June’s headline CPI print of 5.4% was the highest reading for nearly 13 years. Observers on both the Democratic and Republic side will be hoping this can be tamed relatively soon.

Powell has promised that if inflation runs rampant, “we will use our tools to guide inflation back down.”

But “it would be a mistake to act prematurely.”

Sticking with the US economy, we are due the first reading of the nation’s Q2 GDP on Thursday.

So far, predictions are good. Deloitte cites technological advances may help power the US towards another bumper quarter – outstripping pre-pandemic growth levels.

The Conference Board has predicted the US economy will grow at an annualised 9% in 2021’s second quarter.

“As the economy fully reopens and consumer confidence continues to rise, we expect consumer spending to help drive the recovery forward – especially spending on in-person services,” TCB said. “These outlays will be underpinned by a strengthening labour market and a large pool of savings derived from three rounds of fiscal stimulus checks dispersed over the last year.”

We’ve also seen in previous PMI releases that manufacturing and services sectors have continued to act on a growth footing into June following a strong April and May. Three months of solid PMI performance should help power US GDP growth this quarter.

But again, all of this pent up demand being unleashed is leading into the higher core consumer goods prices the US is currently experiencing. We’ve also had reports of high input prices starting to affect manufacturing output too. June’s manufacturing PMI reading was actually slightly lower than May’s for instance.

But, if predictions are correct, the US is about to experience one of its best periods of quarterly growth since the Second World War.

Moving away from data, it’s the busiest week for earnings season this quarter so far.

Nearly 40 US large caps are due to share their Q2 earnings this week. This includes the bulk of the FAANG stocks. Netflix reported last week, but these remaining tech giants, Alphabet (Google), Amazon, Facebook, and Apple, are all reporting in.

Tesla, however, kicks off proceedings with its earnings summary coming on Monday after US market close.

This is interesting because Tesla has rocketed 330% in terms of share price between May 2020-May 2021 and traditionally share prices tend to rise prior to Tesla releases. They have done so at an average of 1.6% ahead of all quarterly releases for the past three years.

Elon Musk’s carmaker has much to celebrate this quarter. It delivered 200,000 in a quarter for the first time. Tesla has also unleashed a range of new automation services, based on an $199-per month subscription service.

Earnings forecasts are strong, but we’ll know more on Monday.

For more information on which large caps are reporting, be sure to check out our US earnings calendar.

Major economic data

Date Time (GMT+1) Asset Event
Mon 26-Jul 9.00am EUR German ifo Business Climate
 
Tue 27-Jul 3.00pm USD US Consumer Confidence
 
Wed 28-Jul 2.30am AUD CPI q/q
  2.30am AUD Trimmed Mean CPI q/q
  1.30pm CAD CPI m/m
  3.30pm OIL US Crude Oil Inventories
  7.00pm USD FOMC Statement
  7.00pm USD Federal Funds Rate
  7.30pm USD FOMC Press Conference
 
Thu 29-Jul 1.30pm USD Advanced GDP q/q
  3.30pm GAS US Natural Gas Inventories
 
Fr 30-Jul 9.00am EUR Germany Preliminary GDP q/q
  1.30pm CAD GDP m/m
  1.30pm USD Core PCE Price Index m/m

 

Key earnings data

Mon 26 Jul Tue 27 Jul Wed 28 Jul Thu 29 Jul Fri 30 Jul
Tesla 3M Automatic Data Processing CME AbbVie
General Electric Boeing Keurig Dr Pepper Aon
Advanced Micro Devices McDonald’s Mastercard Caterpillar
Alphabet (Google) Pfizer Merck Chevron
Apple Shopify Amazon Exxon Mobil
Microsoft Spotify Gilead Procter & Gamble
Mondelez Facebook Liberty Global Takeda Pharmaceutical
Starbucks Ford Pinterest Berkshire Hathaway
Teladoc Health PayPal Twilio
Visa Qualcomm

 

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