This week has several key data releases in store, with the US CPI reading taking centre stage on Wednesday — the Federal Reserve has said it needs to see more evidence of slowing US inflation before it cuts interest rates. Markets will be focused on the figure as the Fed seems to have laid the groundwork for a cut at its next meeting in September.
The UK GDP reading on Thursday will also be of note, as the Bank of England expects the Q2 figure to match the 0.7% growth shown in Q1. Walmart earnings are up after the UK GDP, with the Arkansas-based retail giant looking to build on the strong showing in the previous quarter.
Here are the week’s key events:
Monday will be short of significant data reports, with markets gearing up for the US CPI release later in the week. The monthly OPEC report is due — and investors will be keen to see if the organization sticks to its forecast for relatively strong growth in oil demand in 2024 and next year.
On Monday, a global stock market rout deepened on concerns of a potential recession in the United States after weak jobs data, dragging oil prices to multi-month lows.
The New York Fed will also release its one-year consumer inflation expectations survey today, offering additional insights into price rises in the United States ahead of the US inflation reading on Wednesday.
Earnings: Barrick Gold
The US Producer Price Index (PPI) will be in focus ahead of the CPI report on Wednesday, with markets looking for signs of softening inflation ahead of the Fed’s September meeting.
Earnings: Home Depot (HD)
The Reserve Bank of New Zealand (RBNZ) will make its interest rate decision public in the early hours on Wednesday. At its July meeting, the RBNZ held its cash rate steady at 5.5%, but opened the door to potential easing if inflation slows. Traders anticipate that the RBNZ will keep the current interest rate steady at its August 14 meeting, with a likely rate cut expected in October.
Markets will then zero in on the US inflation reading, given the Federal Reserve’s recent signal of a potential rate cut in September.
Earnings: Tencent Holdings (700), Cisco Systems (CSCO)
The Bank of England has raised its growth forecasts for the UK economy this year, despite cautioning that underlying momentum remains weak. According to the Bank's August Monetary Policy Report, gross domestic product (GDP) is now projected to grow by around 1.25% in 2024, a significant increase from the previous estimate of 0.5%.
In the near term, UK GDP growth for the second quarter is expected to align with the 0.7% recorded in the first quarter of 2024.
Arkansas-based US retail giant Walmart will also look to build on its strong showing in Q1 as it reports earnings for Q2. WMT stock was up close to 30% year-to-date at the time of writing.
US retail sales figures will indicate the strength of consumer spending in America — concerns over softening spending data and signs of a slowing US economy triggered Monday’s market rout last week.
Earnings: Walmart (WMT)
Friday looks to be fairly tame in terms of data releases and earnings. Figures of note include the UK retail sales data and the Atlanta Fed GDPNow estimate, which is the running estimate of real GDP growth in the US based on available economic data for the current quarter.
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