What will drive the markets this week?
Investors’ confidence was bolstered by positive Big Tech earnings, economic data, and central bank announcements, leading to gains in the three major U.S. indexes at the end of the week, signaling a soft landing for the U.S. economy. The Dow Jones Industrial Average (.DJI) climbed 176.37 points (0.5%) to reach 35,459.09. The S&P 500 (.SPX) recorded an advance of 44.76 points (0.99%) to reach 4,582.17, and the Nasdaq Composite (.IXIC) surged 266.55 points (1.9%) to close at 14,316.66.
In contrast, European shares retreated from multi-month highs due to mixed earnings and a surprise Bank of Japan policy tweak. However, German blue-chips closed at a record high as signs of cooling inflation were observed, with Germany’s DAX index hitting an intraday record and closing 0.39% higher, thanks to the downward trend in inflation in Europe’s largest economy.
Meanwhile, Japan’s Nikkei 225 experienced a decline of as much as 2.4% on Friday, following the Bank of Japan’s adjustment to its yield curve control policy, which raised speculation about a potential shift in its massive stimulus program.
As we look ahead to the coming week, earnings season will continue, with reports due from major companies like Apple and Amazon, among others. Moreover, updates on the labor market, including the Job Openings and Labor Turnover Survey (JOLTS) for June, ADP’s National Employment Report, and the July nonfarm payrolls report, will be eagerly awaited. Additionally, we can anticipate the release of PMI readings from S&P Global and the Institute for Supply Management (ISM), along with inflation and GDP readings from the eurozone, and an interest rate decision from the Bank of England (BoE).
Events expected to move the markets this week
Monday, July 31
- Arista Networks (ANET), Republic Services Inc. (RSG), ON Semiconductor Corp. (ON), Welltower Inc. (WELL), Diamondback Energy (FANG), and Eversource Energy (ES) report earnings
- Chicago Purchasing Managers’ Index (PMI)
- Dallas Fed Manufacturing Index (Jul)
- Euro Area Inflation Rate - Flash Estimate (Jul)
- Euro Area GDP Growth Rate - Flash Estimate (Q2 2023)
Tuesday, August 1
- Merck (MRK), Pfizer (PFE), Toyota Motor Co. (TM), Advanced Micro Devices (AMD), Caterpillar (CAT), BP (BP), Starbucks (SBUX), Uber Technologies (UBER), Mitsubishi Financial Group (MUFG), Altria Group (MO), and Marriott International (MAR) report earnings
- S&P Global Manufacturing PMI - Final Reading (Jul)
- ISM Manufacturing PMI (Jul)
- Construction Spending (Jun)
- Job Openings and Labor Turnover Survey (JOLTS) Report (Jun)
Wednesday, August 2
- Qualcomm (QCOM), CVS Health Corp. (CVS), Shopify (SHOP), PayPal Holdings (PYPL), Equinix (EQIX), Thomson Reuters Corp. (TRI), Ferrari (RACE), Humana (HUM), Phillips 66 (PSX), and MetLife Inc. (MET) report earnings
- ADP National Employment Report (Jul)
- Vehicle Sales (Jul)
Thursday, August 3
- Apple (AAPL), Amazon (AMZN), ConocoPhillips (COP), Amgen (AMGN), Stryker Corporation (SYK), Booking Holdings (BKNG), Gilead Sciences (GILD), Airbnb (ABNB), Cigna (CI), and Occidental Petroleum (OXY) report earnings
- Challenger, Grey and Christmas Job Cuts (Jul)
- S&P Global Composite PMI - Final Reading (Jul)
- ISM Services PMI (Jul)
- Factory Orders (Jun)
- Bank of England Policy Meeting and Interest Rate Decision
Friday, August 4
- Enbridge Inc. (ENB), NatWest Group (NWG), Sumitomo Mitsui Financial Group (SMFG), Dominion Energy (D), and Liberty Media Corp. (FWONA) report earnings
- U.S. Nonfarm Payrolls Report (Jul)