Another huge week ahead
The week is off to a mixed start which isn’t wholly surprising given just how much investors have to follow in what is typically a peaceful time of year.
Source – Thomson Reuters Eikon
There’s no summer lulls just yet, with the Fed about to embark on an easing cycle, the BoE offering its first assessment since Boris Johnson became PM, a third of S&P 500 and a quarter of Dow companies reporting second quarter earnings, the US jobs report being released and trade talks restarting between the US and China. As ever, this is almost entirely spread over four days so today may be the calm before the storm.
It’s tough to pick the headline act among all of these, more often that not we’d be looking at the jobs report but that’s fallen well down the pecking order this time around. It’s hard to look past Wednesday’s Fed decision because although a rate cut is entirely priced in, market expectations are high over the coming months which means Powell will have a job keeping up.
The market rally is so heavily reliant on central banks promising more accommodation that Powell will have to be very careful not to disappoint too much or it could be a very long summer. Earnings season may be going well thanks to a very low bar but we’re almost half way into the season and still heading for an earnings recession, so we can’t look here for support.