By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The ongoing rift between President Trump and U.S. Federal Reserve Chairman Powell will be front and center this week with the next Federal Open Market Committee meeting looming at the end of the month. Treasury Secretary Bessent spoke to President Trump on why Chairman Powell should retain his position, while Governor Waller publicly laid out the case for immediate rate cuts. Fed Chairman Powell favors a more patient approach, and this public divergence could potentially lead to heightened volatility. Mr. Powell will make comments on Tuesday.
- Earnings season remains in high gear. This week, highlights include Alphabet, Tesla, Coke and Intel. Of the 58 S&P 500 companies that have reported so far, 86% have posted positive surprises.
- The data calendar is light, highlighted by existing and new home sales and the index of leading indicators.
Three Things to Know
- What is the symbolism behind the leader’s jersey being yellow during the Tour de France? Maybe it’s supposed to represent the sun, like the most famous King of France, Louis XIV? Or maybe because yellow was associated with highness, sacredness and might? As a matter of fact, the Tour de France originates from a newspaper that was printed on yellow paper–so it was all an advertising strategy. (Source: kevmrc.com)
- S&P second-quarter earnings growth is expected to be just 5.3%, a low bar for companies to jump over. (Source: Markets & Mayhem)
- The S&P 500’s cyclically adjusted price-to-earnings, or CAPE, ratio is about to cross above 38 for the third time in history, now higher than 98% of historical valuations. (Source: Charlie Bilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.