Last week the stock market climbed higher primarily driven by positive earnings reports. The U.S. market further increased the distance from its mid-June lows and international markets also moved up from their early-July lows. This coming week is full of important economic data and will be a key test to see if the rally continues or reverses.
We’re entering the busiest week for quarterly earnings reports with some of the largest companies reporting, such as Apple, Microsoft, Amazon, and Meta Platforms (Facebook). At this point in the business cycle, the market doesn’t need great news to rally, just less negative news. Currently earnings have been better than expected and have added fuel to the rally, following fears that this earning season was going to be dismal.
On Wednesday the Federal Reserve will finish its two-day meeting and I believe it will only have a big impact on the market if they make a significant change to the anticipated policy of a 0.75% rate increase. The inflation and jobs reports that came out earlier this month were the crucial numbers and I see this meeting as a cap to that information.
On Thursday we will get our first look at Quarter 2 GDP (Gross Domestic Product). If this number is negative, it may indicate we are in an economic recession and the media will likely use this as a sensational headline. The newsletter on August 1st will give you a good understanding of what recessions are, how they are defined, and help elevate you above the media hype.
Photograph by: Markus Winkler on Unsplash
.
.
.
.
.