This week ahead || Jul 15th - Jul 19th 2024
Here's your news for the week ahead.
Business leaders condemn political violence after Trump injured in shooting
After surviving an assassination attempt at a campaign rally in Butler, Pennsylvania, where a shooter killed an audience member and injured him, Donald Trump received widespread support and condemnations of political violence from business leaders. Apple CEO Tim Cook, Amazon CEO Andy Jassy, and Meta CEO Mark Zuckerberg were among those expressing solidarity and condemning the attack. President Joe Biden also condemned the violence and spoke to Trump. Tesla CEO Elon Musk formally endorsed Trump and criticized the Secret Service, while Pershing Square CEO Bill Ackman also backed Trump. Despite the incident, Trump expressed gratitude to first responders and confirmed he was fine, looking forward to the Republican National Convention.
Netflix results, retail sales, and a chip update: What to watch this week
The biggest economic event of July has passed, shifting investors' focus to the corporate earnings calendar. Netflix will lead Big Tech in reporting quarterly earnings on Thursday, while ASML and Taiwan Semiconductor Manufacturing Company will release results on Wednesday and Thursday, respectively, amid ongoing interest in the AI trade. ASML, a key lithography machine maker, and TSMC, the largest chip manufacturer, are pivotal to the tech sector. Additionally, earnings from Goldman Sachs, Morgan Stanley, Bank of America, Johnson & Johnson, American Express, UnitedHealth, and Travelers will provide insights into various industries. Political events, including the aftermath of an assassination attempt on Donald Trump and the upcoming Republican National Convention, also loom large. Economic data will be sparse, with June's retail sales report on Tuesday being a key focus, especially after May's unexpected slowdown. Oxford Economics predicts a 0.4% drop in retail sales due to lower gas prices but anticipates a rise in real consumption. Recent inflation data bolstered expectations for a Federal Reserve rate cut in September, with June's inflation and jobs report indicating economic cooling. Fed Chair Jerome Powell's upcoming appearances will be closely watched for hints on future monetary policy.
Fed's Powell 'may prefer not to change rates before an election', strategists say
The softer-than-expected inflation report for June has increased market expectations for a rate cut by the end of the year, possibly before the November elections. This speculation has contributed to the US dollar's recent decline and boosted various market sectors, including bonds, small-cap stocks, and homebuilders. Gavekal Research noted that current inflation data is more favorable for rate cuts than it was last year, with the three-month annualized consumer price index (CPI) and core CPI both falling below the Fed's 2% target. If low inflation persists and the Federal Reserve remains confident in this trend, policy rates are likely to be lowered before the end of 2024, potentially ahead of the elections. Gavekal Research pointed out that historical precedent shows the Fed has altered rates in the months leading up to presidential elections, doing so eight times out of 13 since 1974. This suggests that the central bank may make policy changes during election periods if economic indicators justify it. Given these trends, an interest rate change before the November elections appears likely if current inflationary trends continue.
Swiss authorities draw flak in Credit Suisse probe, report says
Preliminary findings in a highly anticipated parliamentary report on the 2023 collapse of Credit Suisse have identified significant failures by Swiss regulatory authorities prior to the bank's downfall, as reported by SonntagsZeitung. Sources from the parliamentary committee, which is drafting the PUK report, indicated that financial market regulator FINMA, the Swiss National Bank (SNB), and the finance ministry all faced criticism for not preventing the bank's collapse. Isabelle Chassot, head of the parliamentary committee, confirmed that they had established the statement of facts but emphasized that no conclusions had been drawn yet. The article's claims about majority or minority opinions within the committee were also refuted. The newspaper reported that FINMA was seen as too hesitant and could have intervened earlier when Credit Suisse's problems became apparent. It also highlighted a lack of preparation and other errors by Swiss authorities, including the central bank. Following mounting issues at the bank in 2022, Credit Suisse unraveled in March 2023 and was taken over by UBS in a rescue orchestrated by authorities. Neither FINMA nor the SNB responded immediately to requests for comment, and the finance ministry had no comment. Earlier this month, SNB chairman Thomas Jordan attributed the collapse to Credit Suisse's management, asserting that authorities had been well-prepared and had prevented a broader financial crisis.
