This week ahead || Aug 7 - 11 Aug 2023
Inflation and Disney: What to watch this week
The stock market's strong 2023 rally hit a bump as July turned to August. The July jobs report indicated a cooling labor market, and Apple's mixed quarter added to the uncertainties. However, Amazon's strong earnings drove the tech giant's stock up 8%. The week ahead will focus on inflation data for July and earnings updates from Disney. Despite challenges, investors remain attentive to the robust set of data that will be presented to the Fed before their next policy decision in September.
US Inflation Data May Offer Some Comfort to the Fed
The stock market's strong 2023 rally faced challenges in August as the July jobs report showed a cooling labor market and Apple reported a mixed quarter. However, Amazon's strong earnings drove the tech giant's stock up 8%. Inflation data for July and Disney's earnings will be in focus in the week ahead. Economists project the Consumer Price Index to rise 0.2% in July, while the Labor Department's core measure is expected to increase by 4.8% from the previous year. This data may influence the Federal Reserve's policy decision in September. Additionally, investors will be monitoring global economic developments, including China's potential drop in consumer prices and rate decisions from central banks in India and Mexico.
Israel stocks higher at close of trade; TA 35 up 0.68%
Israeli stocks showed positive momentum as the TA 35 index rose 0.68% in Tel Aviv. The Oil & Gas, Insurance, and Real Estate sectors led the gains. Teva Pharmaceutical Industries Ltd and Israel Corp were among the best-performing stocks, rising by 3.82% and 3.49%, respectively. ICL Israel Chemicals Ltd also saw a notable increase of 3.29%. On the other hand, Ormat Technologies experienced a decline of 4.82%, reaching 52-week lows. Crude oil prices rose, with September delivery up 1.34% to $82.64 a barrel, while Brent oil for October delivery increased 1.19% to $86.15 a barrel. The US Dollar Index Futures dropped 0.51% to 101.83.
JPMorgan raises US economic growth estimate, no longer expects 2023 recession
JPMorgan's chief economist, Michael Feroli, stated that the bank is no longer forecasting a U.S. recession for this year and has revised its economic growth estimate upwards, anticipating the economy to expand at a "healthy pace." The current-quarter real annualized GDP growth estimate has been raised to 2.5% from 0.5%. Feroli cited factors such as the swift resolution of the debt ceiling and regulators' implicit guarantee of bank depositors during the regional banking crisis earlier this year as reasons for reduced financial crisis risks. While a recession is no longer the base case, Feroli warned that it could still happen if the Federal Reserve continues raising rates, especially if there is an upside inflation surprise. The U.S. will report July consumer price data on August 10.