Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Top 5 Things to Watch in Markets in the Week Ahead

Economy Jul 31, 2022 08:27AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
YUM
+2.12%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HOOD
+7.13%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ABNB
+5.53%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
UBER
+9.17%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MRNA
+3.87%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
PYPL
+6.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Noreen Burke

Investing.com -- After data on Thursday showing that the U.S. economy is on the cusp of a recession this Friday’s monthly employment report will be even more highly anticipated than usual. The report is expected to show that the labor market remains robust, despite reports that some companies are cutting jobs and freezing hiring. Investors will also continue to digest a slew of earnings results with dozens of companies set to report in the coming week. Several Fed officials are set to speak, and their comments will also be closely watched. Meanwhile, the Bank of England is expected to accelerate the pace of rate hikes as it steps up efforts to curb inflation. Here’s what you need to know to start your week.

  1. Nonfarm payrolls

Friday’s nonfarm payrolls report for July will show whether the recent barrage of Fed rate hikes have impacted the labor market.

Analysts expect the economy to have added 250,000 jobs in July, moderating from June’s pace of 372,000, while the unemployment rate is expected to hold steady at a historic low of 3.6%.

 A smaller than expected number could bolster the view that the Fed may not be as aggressive as expected when it comes to interest rate hikes after Fed Chair Jerome Powell said last week that the central bank’s September rate decision will be data dependent.

The Fed hiked rates by 0.75% on Wednesday, the second hike in a row of that size.

After data last Thursday showed the U.S. economy contracted in the second quarter, equity markets were boosted by bets that interest rates would rise more slowly.

  1. Fedspeak

Investors will get a chance to hear from several Fed officials this week, including Chicago Fed President Charles Evans, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester. Their comments will be watched for any indications that a smaller rate hike may be on the cards in September after recent data pointing to economic weakness.

Given mounting fears over the prospect of a recession, market watchers will also be paying particular attention to the Institute of Supply Management’s manufacturing PMI on Monday, and the ISM services PMI on Wednesday, which are both expected to confirm that the economy is slowing.

The U.S. is also to release data on JOLTS job openings on Tuesday. While job openings have been easing in recent months they are expected to remain at elevated levels.

  1. Earnings deluge

Some better-than-expected earnings reports helped boost stocks last week and the deluge of earnings results is set to continue in the coming week with a broad range of companies, including Activision Blizzard (NASDAQ:ATVI), Caterpillar (NYSE:CAT), Uber (NYSE:UBER) and Eli Lilly (NYSE:LLY) reporting.

Positive forecasts from Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Friday showed resilience in giant companies to survive an economic downturn.

Second-quarter U.S. corporate results have mostly been stronger than expected. Of the 279 S&P 500 companies that have reported earnings so far, 77.8% have exceeded expectations according to Reuters data.

Other companies reporting during the week include Loews (NYSE:L), Dupont De Nemours (NYSE:DD), Starbucks (NASDAQ:SBUX), Airbnb Inc (NASDAQ:ABNB), Advanced Micro Devices (NASDAQ:AMD), PayPal (NASDAQ:PYPL), Booking Holdings (NASDAQ:BKNG), eBay (NASDAQ:EBAY), CVS Health (NYSE:CVS), Moderna (NASDAQ:MRNA), Under Armour (NYSE:UAA), AMC Entertainment (NYSE:AMC), Yum! Brands Inc (NYSE:YUM), Robinhood (NASDAQ:HOOD) and Restaurant Brands (NYSE:QSR).

  1. Stocks rally

U.S. stocks added to their recent rally on Friday, with all three major indexes gaining for the month and for the week.

The S&P 500 gained about 9.1% for July in its biggest monthly percentage gain since November 2020, while the Nasdaq jumped about 12.3% in July in its biggest monthly gain since April 2020.

Stocks were boosted by mainly upbeat earnings reports, along with investor speculation that the Fed may not need to be as aggressive with interest rate hikes as some had feared.

Despite the positive end to the month for stocks, Mark Haefele, chief investment officer at UBS Global Wealth Management, told Reuters investors should proceed with caution, noting: "In the near term, we think the risk-reward for broad equity indexes will be muted. Equities are pricing in a 'soft landing,' yet the risk of a deeper 'slump' in economic activity is elevated."

  1. Bank of England to accelerate rate hikes

The Bank of England is widely expected to hike rates by half a percentage point at its meeting on Thursday, which would be its largest hike since 1995.

Only three BoE officials voted in favor of a 0.5% rate hike at the bank’s last two meetings, but data since then has shown inflation hitting a four-decade high of 9.4%. It could hit 12% by October - six times the BoE target.

Governor Andrew Bailey has pledged to act forcefully if needed to get inflation down.

Elsewhere, the Reserve Bank of Australia is expected to hike rates by 0.5% at its upcoming meeting on Tuesday with inflation Down Under running at 6.1%, more than double the RBA’s 2-3% target.

--Reuters contributed to this report

Top 5 Things to Watch in Markets in the Week Ahead
 

Related Articles

Marketmind: Bear trap?
Marketmind: Bear trap? By Reuters - Oct 04, 2022

(Reuters) - A look at the day ahead in Asian markets from Jamie McGeever Genuine turning point, or classic bear market rally? World markets continue to rip higher as the dollar,...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (13)
Peter Andersen
Peter Andersen Aug 01, 2022 11:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Green to day who was saying it will go in red big time hello surprise
Mehdi Captain Music
Mehdi Captain Music Aug 01, 2022 3:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
There are many ways to get around printing paper money. It is not enough to solve the needs of the people and the government with money. Money conflict between producers and consumers is itself inflationary. Money complicates the issue.
Mehdi Captain Music
Mehdi Captain Music Aug 01, 2022 3:19AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The old and new inflation control solutions that are applied without testing at a smaller level are nothing but trial and error.
Peter Andersen
Peter Andersen Aug 01, 2022 2:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It the corona that started this and greedy
David Ben Simoun
David Ben Simoun Aug 01, 2022 1:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
J Powell has it wrong since the beginning. He kept talking about "transitory" inflation until inflation showed to be resilient. Now, instead of ripping the band-aid, he served the market with a positive narrative and "neutral" story. The FED has been weak and behind the curve all along. A short recession is painful but much less than a persistent inflation. Because of FED's put and J Powell sloppiness, we are heading to stagflation and more hardship for everyone. Thanks J Powell...
First Last
First Last Aug 01, 2022 1:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Russians lied that the troops massed at Ukraine's border were training only and won't invade; Powell didn't see the Russian-cause inflation that was coming.
Gabo Kete
Gabo Kete Aug 01, 2022 1:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so true... I reckon Powell is "cautions" thinking ahead of the elections so not want to ruin Biden's party elections, by showing the ppl the worse recession in 40 years happened under Biden's term
Brad Albright
Brad Albright Aug 01, 2022 1:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
By what measure are we in the worst recession in 40 years? GDP? Unemployment? Maybe you don't know what your are talking abiutt.
First Last
First Last Aug 01, 2022 1:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gabo Kete   IF that is Powell's motivation, and I'm not saying it is, can/should we blame him?  Trump did threaten to fired him and end Fed's independence.
Peter Andersen
Peter Andersen Jul 31, 2022 11:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It had been a good July soo maybe a bad start August lets see the rate must up it good war in Europe people stop spending economy will drop an then we go up is that not normally glad i have been buying bavarian Nordic let sell some monkey’s box have a nice day folks god bless Ukrainischen people
Marco cuevas
Marco cuevas Jul 31, 2022 9:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So far fake financial journalism has put out numerous stories on Sell the news to drop the market tomorrow W...overlords have spoken for a red market tomorrow.
Brad Albright
Brad Albright Jul 31, 2022 9:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This is true! I was at the meeting of the overlords on Saturday. We were all sitting around the pool doing shots of adrenechrome and vaping placenta and JFK, Jr. said, let's put out numerous stories on sell the news to drop the markets. So, we did.
Marco cuevas
Marco cuevas Jul 31, 2022 2:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
There was a lot of egative financial news last week as fifake financial journalism tried to get investors to sell blatant manipulation by big media conglomerates a d big money...let's see what happens this week.
Brad Albright
Brad Albright Jul 31, 2022 2:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Let me see if I understand fully your comment: Your belief is that the multitude of individuals, organizations and companies around the globe that comprise financial journalism, somehow conspired to act in unison to try to get the multitude of individuals, organizations and companies around the globe that comprise stock market investors to sell stock. Two questions: 1) How is this coordinated and synchronized? and 2) Why? How do all the people involved benefit?
First Last
First Last Jul 31, 2022 2:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Brad Albright   Most of the people criticizing the articles here are lacking in reading comprehension.
Art Carrano
Art Carrano Jul 31, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The ten most recent recessions, dating back decades, were declared based on 2 consecutive quarters of economic contraction. Everyone accepted the definition and the declaration. It wasn't contested. Until now. What changed?
First Last
First Last Jul 31, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Unemployment spiked up in past recessions.
Dmitriy Khavko
Dmitriy Khavko Jul 31, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Our President)))))
First Last
First Last Jul 31, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Putin was not the president during any of the US' previous recessions?
Robert Wimberly
Robert Wimberly Jul 31, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We have an idiot overseeing the country. But all he fixed once the donald is back in the white house
Brad Albright
Brad Albright Jul 31, 2022 12:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Your premise is wrong.
David Oldham
David Oldham Jul 31, 2022 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So this web site has taken the White House lie hook line and sinker.  The cusp of a recession???  WE IN FACT ARE IN A RECESSION FOOLS!  Enough games, stick with the historical definition.  If this were a Republican they'd be calling it a great recession.  Enough woke, grow up!
jason xx
jason xx Jul 31, 2022 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No we are not. It's not up to you to decide. Just because wall street started an old wives tale about 2 negative quarters alone being a recession and people like you believe everything u hear does not make it so fool
Ronald Warren
Ronald Warren Jul 31, 2022 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
jason xx Woke up on the wrong side of the bed ? 🤣🤣🤣
andrew mccorkle
andrew mccorkle Jul 31, 2022 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
First Last
First Last Jul 31, 2022 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We are in or not in a recession depending on whose definition of recession you use.  We are NOT in a recession based on official definition.
First Last
First Last Jul 31, 2022 10:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
For some strange reason, some people think the potus was using the definition from the peanut gallery when he was talking about recession.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email