Three Things to Know & Watch

By Bill Hornbarger, Chief Investment Officer

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Three Things to Watch

  • This is the biggest week of the earnings season with approximately one-third of the S&P 500 set to release earnings. Big names on the docket include Apple, Amazon, Microsoft, Meta, Pfizer, and UPS. Roughly 20% of the S&P companies have announced current quarter earnings, and of that group 75% have posted earnings surprises.
  • Plenty of economic data to look at this week including new and pending home sales, durable goods, Q2 GDP, and consumer confidence. On Friday, the personal consumption expenditure (PCE) price index will be released and core PCE (the Fed’s favored inflation measure) is forecasted to be up 4.7% year-over-year. The YOY increase in core PCE has been lower the past three months.
  • The two-day FOMC meeting will adjourn Wednesday afternoon and the Fed is expected to raise the target Fed funds rate by 75 basis points (bps) to 2.25% – 2.50%. The Fed continues to provide guidance that reducing inflation is the number one priority.

Three Things to Know

  • Gas prices in the US have declined to $4.37/gallon (national average), 65 cents below their all-time high in mid-June. (Source: Charlie Bilello)
  • The highest Fed funds rate was 20% in the spring of 1980 under the then Chairman Paul Volcker. (Source: the balance.com)
  • Last week the European Central Bank raised rates by 50 bps to fight inflation. Of the major central banks, Japan has not yet raised rates this cycle and has not increased rates for 165 consecutive months. (Source: Bloomberg, ECB)

 

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.