This week’s trading notes: The U.S. stock market super earnings week is approaching, and important earnings reports to be announced include Microsoft, Alphabet, Facebook’s parent company Meta, Apple, Amazon, and more. At the same time, another highlight this week is the US Federal Reserve (Fed) will announce the July interest rate decision, the market is expected to raise interest rates three yards (75 basis points), in addition, the US gross domestic product (GDP) in the second quarter will also be Announced this week.
This week’s trading notes (0725-0729)
1. The Fed announces its July interest rate decision
The Fed will announce its monetary policy decision on Wednesday (Thursday, Taipei time). The market once thought it would raise interest rates by 4 yards (1 percentage point), but Fed officials ruled out this view, so economists are still expected to raise interest rates by 3 yards. .
Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, said the chances of a recession would increase if the Fed remains tight for too long, and he currently forecasts a 60 percent chance of a recession in the coming year. Markets might also be volatile if Fed Chairman Bill Bowler is more hawkish and hawkish than expected.
Fed Chairman Powell has already said that a July rate hike will be a “choice of two” between 50 or 75 basis points, but so far, major Fed officials have indicated a preference for 75 basis points.
Notably, swap traders who bet on the Fed’s monetary policy are now pricing in a two-yard rate hike in September rather than a three-yard rate hike (75 basis points) that month. Traders made the switch largely out of fears of a weakening U.S. economy that might slip into recession.
In addition, economists expect the Fed to raise interest rates by another yard (25 basis points) early next year, bringing rates to a high of 3.75%, then stop raising rates and start cutting rates by the end of next year.
2. U.S. stocks welcome the super earnings week, and the five tech giants’ earnings will be announced
The financial reports of the five tech giants known as “MAMAA” or “MAMAA” will be announced next week, with Microsoft (MSFT-US)、Alphabet(GOOGL-US) will report results following the U.S. stock market closes on Tuesday, followed by Facebook parent Meta (META-US) debuted on Wednesday, Apple (AAPL-US), Amazon (AMZN-US) U.S. stocks report earnings following the bell on Thursday.
Grohowski said: “The outlook of the big companies is more important than the earnings report itself. Cross-reference the corporate narrative with the statistics of the events that have occurred, and I believe this is going to be a wildly volatile week.”
3. U.S. second-quarter GDP data released
The United States will announce the second-quarter GDP on Thursday (28th), and many institutions have estimated that it may show a negative value. As a result, it will be a contraction following a 1.6% decline in the first quarter. Two consecutive quarters of negative growth, if confirmed by other data, it is technically regarded as a recession.Dow JonesThe average estimate of economists surveyed by the Social Security Administration is for a slight increase of 0.3%.
at the same time,EURThe district is also to release second-quarter GDP data.The European Central Bank (ECB) raised interest rates for the first time in 11 years last week, and raised interest rates two yards at a time, exceeding market expectations. This move also means thatEURThe district’s eight-year era of negative interest rates is finally over.
In addition, in order to prevent the political turmoil in Italy from triggering the European debt crisis, the ECB launched a new anti-financial splitting tool TPI (Transmission Protection Instrument) to ensure that the market will not push up the borrowing costs of fragile economies excessively, and that monetary policy can be used throughout the entireEURsmooth transfer of the area.
