Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Top 5 Things to Watch in Markets in the Week Ahead

EconomyJul 25, 2021 19:34
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Noreen Burke

Investing.com -- It’s set to be a busy week in the markets with the Federal Reserve meeting, a series of high-profile earnings and some key economic data on the slate. While no policy changes are expected from the Fed’s two day meeting more details will likely emerge on the tapering discussions that started in June. With equity markets poised at record highs investors will be closely watching earnings from tech heavyweights and on Thursday investors will get a first look at second quarter U.S. GDP growth, which is expected to be the peak of the post-pandemic recovery. Meanwhile, on Friday the euro zone is to release a slew of data, including reports on inflation, GDP and unemployment. Here’s what you need to know to start your week.

  1. Fed taper talk

The Fed wraps up its two-day meeting on Wednesday and its statement will be scrutinized for any mention of the timeframe for tapering its asset purchase program, although Chairman Jerome Powell made it clear in his recent testimony to Congress that the U.S. economy still needs the central bank's full support.

In June, policymakers began debating when to start cutting monthly purchases of $120 billion of Treasuries and mortgage-backed securities.

Powell may indicate that while a discussion on tapering has started, there is still time before officials reach a conclusion on what they will do. Policymakers are expected to highlight the risk from the rapidly spreading Delta variant, which investors worry could derail the economic recovery.

Most analysts expect the Fed to give a clearer indication of its plans for scaling back its quantitative easing program at its annual conference in Jackson Hole, Wyoming, in late August, before a formal announcement on tapering later in the year.

  1. Data dump

Aside from the Fed meeting, investors will get an update on the strength of the U.S. economy with an end-of-month data dump.

Monday sees figures on new home sales, which are expected to hit new highs, followed by durable goods orders and consumer confidence on Tuesday.

The highlight is on Thursday with a first look at second quarter GDP and while expectations have been trimmed back in recent weeks, growth is still expected to be strong at 8.6% annualized. This would mark the recovery of all the lost output caused by the pandemic and could be the peak of the post-pandemic recovery.

Figures on personal income and spending are due Friday, which include the Fed’s rumored favorite measure of inflation – the core personal consumer expenditure price index.

  1. Earnings deluge

U.S. earnings are kicking into high gear and investors will be watching the largest tech names to gauge whether a recent shift away from reflation trade and into growth stocks that led markets for the last decade will continue.

Earnings from Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) on Tuesday, Facebook (NASDAQ:FB) on Wednesday and Amazon (NASDAQ:AMZN) on Thursday could accelerate a shift back into growth.

FAANG stocks – Facebook, Amazon, Apple, Netflix (NASDAQ:NFLX), and Google parent Alphabet - are usually known for delivering stellar stock market returns. But only Facebook and Alphabet have beaten the S&P 500 so far this year as investors piled into financials, energy firms and other companies that should benefit from the post pandemic economic rebound.

Other earnings results that will be in the spotlight include Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA), Boeing (NYSE:BA), Caterpillar (NYSE:CAT), Pfizer (NYSE:PFE), Procter & Gamble (NYSE:PG) and McDonald’s (NYSE:MCD).

  1. Market volatility

Growth and value stocks seesawed for much of last week as investors weighed the surging Delta variant against upbeat earnings results and economic data.

"There’s push and pull, there’s clearly conflict in the market," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina told Reuters. "There’s a strong difference of opinion as to whether the future’s bright or whether there are clouds on the horizon."

All three major U.S. stock indexes closed at record highs on Friday, with the Dow closing above 35,000 for the first time ever following a volatile week as risk appetite waxed and waned. On Monday the S&P 500 recorded its steepest one-day drop since May before going on to post its biggest one-day jump since March a day later.

Earnings and data could soothe or exacerbate market angst in the coming week.

  1. Euro area recovery

In the euro zone, second quarter GDP data on Friday will give investors some insight in the strength of the bloc’s economic recovery from a double dip recession as vaccinations pick up.

Meanwhile, inflation figures the same day are expected to show inflation hit the European Central Bank’s 2% target in July. The ECB has said inflation may be allowed temporarily to exceed its target when "especially forceful or persistent" monetary support is needed.

Last Thursday ECB President Christine Lagarde said a fresh wave of the coronavirus pandemic could pose a risk to the euro zone's economic recovery after the bank hinted at an even longer period of monetary support at its latest policy meeting.

--Reuters contributed to this report

 

Top 5 Things to Watch in Markets in the Week Ahead
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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 (1)
Antonio Titoy
Antonio Titoy Jul 26, 2021 18:58
Saved. See Saved Items.
This comment has already been saved in your Saved Items
very satisfied
 
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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email