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 could 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 could 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 financial report week, the financial reports of the five tech giants will be announced
The financial reports of the five tech giants known as “MAMAA” or “MAMAA” will be announced next week. Microsoft (MSFT-US) and Alphabet (GOOGL-US) will announce their results after the U.S. stock market closes on Tuesday, followed by Facebook’s parent company Meta (META-US). ) debuted on Wednesday, and Apple (AAPL-US) and Amazon (AMZN-US) US stocks announced their earnings after the market 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 after 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. The average estimate of economists polled by Dow Jones was for a modest 0.3 percent increase.
At the same time, the euro zone is also due 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 that the era of negative interest rates in the euro zone for 8 years has finally ended.
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 euro. smooth transfer of the area.