This week ahead || Aug 28th - Sep 1st 2023
Inflation and jobs data on tap as Fed's path remains in focus: What to know this week
In the week ahead, investors will focus on two key data points: the Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation indicator, and the August jobs report. The PCE index is expected to show that "core" inflation, which excludes food and energy, rose by 4.2% year-over-year in July. Meanwhile, the jobs report is expected to reveal an increase of 168,000 jobs in August, with the unemployment rate remaining at 3.7%. These numbers could influence the Fed's monetary policy decisions as it continues to monitor the economy's performance amid concerns about inflation. Additionally, retail earnings from companies like Best Buy and Lululemon, as well as tech sector reports from Salesforce, Okta, and Crowdstrike, will be closely watched. The performance of these companies could provide insights into consumer sentiment and the tech sector's reaction to Nvidia's recent earnings report, which sent shockwaves through the industry.
Why the US war with Big Tech could have unintended consequences
The US government's antitrust lawsuits against major tech companies like Google and Facebook's Meta have the potential to create opportunities for new tech giants to emerge, as past cases against IBM and Microsoft did. However, the outcomes are highly unpredictable, and established tech giants' scale could pose significant challenges for emerging competitors. The current focus on artificial intelligence (AI) in the tech industry may not create the same opportunities for newcomers as previous cases did. Additionally, prolonged legal battles could discourage investment in startups and lead dominant companies to develop technologies in-house. The cases against Big Tech are being closely watched, with the trial against Google set to begin in September.
China's 'aggressive behaviour' in South China Sea must be challenged - U.S. Navy official
The commander of the U.S. Navy's Seventh Fleet, Vice Admiral Karl Thomas, has spoken out against China's "aggressive behavior" in the South China Sea and pledged U.S. support to the Philippines in the face of shared challenges in the region. He emphasized the need to challenge and push back against aggressive actions, citing an incident on August 5th when a Chinese coast guard ship used water cannon against a Philippine boat. Thomas expressed his commitment to understanding the challenges faced by the Philippines and offering assistance when possible. China's territorial claims in the South China Sea have been a source of tension in the region, with multiple countries contesting its claims.
US Commerce chief seeks trade, tourism boost in China talks
U.S. Commerce Secretary Gina Raimondo has arrived in Beijing for a four-day visit aimed at boosting business ties between the United States and China. Raimondo emphasized that while she aims to promote cooperation in areas where possible, she will not compromise on national security trade measures. Tensions exist between the two countries, particularly regarding access to advanced semiconductors. Raimondo is expected to hold bilateral meetings with Chinese officials and discuss a range of economic and trade issues. She also seeks to boost travel and tourism between the two nations, aiming to bring back tourism to pre-pandemic levels, which would benefit both economies.