Amid plunging commodity prices, disappointing earnings on Wall Street and concerns about a protracted slowdown in China, the week ahead features a slew of market-moving events headlined by the Federal Reserve and US second quarter GDP data.
Wall Street closed in the red last week, with the Dow Jones Industrial Average turning negative for 2015 amid a string of disappointing quarterly earnings from industrial bellwethers. The Dow capped off its worst week since December following underwhelming earnings scorecards from the likes of Caterpillar (NYSE:CAT), 3M, American Express (NYSE:AXP), IBM (NYSE:IBM), United Technologies (NYSE:UTX) and Apple (NASDAQ:AAPL).
Many of the industrial blue-chips said a stronger US dollar was hurting international sales. The dollar index, a weighted average of the greenback against six global competitors, eased off three-month highs last week, closing at 97.24. However, the dollar has gained an astounding 21 percent since July 2014, mostly stemming from interest rate speculation.
Binary Options Traders will be closely monitoring this week’s Federal Reserve policy meetings in Washington for indication of when interest rates could begin to rise. Although no rate increase is expected Wednesday, the Fed has indicated it would begin raising interest rates later this year. Rates have been kept at an all-time record low of 0.25 percent since December 2008.
The Fed issued a statement last Friday explaining that it inadvertently released staff projections for interest rates and GDP in June, raising fresh doubts about the central bank’s propensity to protect confidential information. The central bank said the staff projections were published in error on June 29, less than two weeks after the June FOMC rate meetings.
On Thursday the Commerce Department will issue its first estimate of US second quarter GDP growth. According to economists polled by Bloomberg, the US economy is forecast to grow 2.9 percent annually in the second quarter after contracting 0.2 percent in the first three months of the year.
Imperial Options Traders may be interested in monitoring other market-moving US data throughout the week. On Monday the Commerce Department will report on durable goods orders and the Federal Reserve Bank of Richmond will release its monthly manufacturing business index.
Markit Group will report on US services PMI Tuesday and the Conference Board will release its closely-followed consumer confidence index.
The National Association of Realtors will report on June pending home sales Wednesday.
The Fed Bank of Chicago will close out the week with its monthly Midwest PMI indicator on Friday.
Internationally, the UK will release preliminary second quarter GDP figures Tuesday, followed by the GfK German consumer confidence survey Wednesday. Germany’s Federal Statistics Office will release preliminary July inflation data Thursday. The European Commission will close out the week with preliminary Eurozone inflation figures Friday.
Imperial Options Traders may also be interested in monitoring the commodity markets this week for signs of slowing global growth. A rout in the commodities market last week sent gold prices to five-and-a-half year lows and US oil below $49 a barrel.
According to The Wall Street Journal, the world’s largest mining companies are looking to slash tens of thousands of jobs to cope with plunging commodity prices. UK mining company Angle American PLC announced on Friday it would cut 53,000 jobs over several years, including 6,000 corporate jobs.