Economy and Markets: The Next Week
Markets reversed last week’s losses on fresh hopes of a Goldilocks economic scenario. Q2 GDP growth was revised downwards, returning to the level of initial forecasts given before the release of the Advance Estimates. Meanwhile, the decline in house prices, which weighed on the outlook for regional and smaller banks, slowed. Hiring remained strong (the increase in the overall unemployment rate may have been a seasonal increase), but the decline in wage growth raised hopes that the job market is cooling.
All of this might be supporting doves within the Fed’s ranks, if not for the continued strength of US consumers. Private spending, the main driver of US GDP growth, jumped in July at the fastest pace since January. At the same time, core PCE, the Federal Reserve’s preferred gauge of inflation, rose on an annual basis, underscoring Jerome Powell’s concern about upside risks to inflation. However, if the softening seen in the consumer confidence index continues, it may indicate an easing of pressures on the demand side of the inflation equation.
After a tough August, stock markets are welcoming the decline with new hopes that the economy will be like the weather in September: cool enough to enable inflation to ease, but not too cold to avoid a recession. Meanwhile, policymakers will keep a close watch on the upcoming economic reports until their next meeting on September 19. It’s also worthwhile for investors to keep an eye on the data, as it could help shed some light on further moves by the central bank and their impact on stock markets.
In this uncertain environment, investors are advised to base their decisions on reliable data and analysis.
Upcoming Earnings and Dividend Announcements
The Q2 2023 reporting season is almost over, but there are still companies reporting this week.
This week’s most notable reports come from Zskeller (ZS), gitlab (gtlb), Gamestop (gme), C3ai (oh), American Eagle (AEO), document mark (Document), and Kroger Company (KR,
The companies’ reporting dates, consensus EPS forecasts, past data, analyst ratings and price targets can be found on the TipRanks earnings calendar.
This week, the ex-dividend dates are coming for Nvidia to pay (NVDA), UnitedHealth (uhhh), Fedex (FDX), Elevens Health (ELV), Becton Dickinson (bdx), Occidental Petroleum (oxy), autolive (ALV), Signa (CI), and other dividend paying firms.
Companies’ ex-dividend and dividend payment dates, analyst ratings and price targets can be found on the TipRanks Dividend Calendar.
Upcoming Economic Calendar Events
Several important reports are due to be published in the next few days:
, On Tuesday, we’ll get a reading July factory ordersIt provides an insight into trends in the manufacturing sector and serves as one of the leading indicators for the overall economy, as it reflects sellers’ attitudes to consumer demand for manufactured goods.
, we’ll get a second guess on wednesday ISM Services PMI for August, which provides a detailed view of the service sector of the US economy. Since services account for about 80% of GDP, the PMI can help economists and policymakers gain an important insight into the direction of the economy, serving as a leading indicator.
, we will see the report on friday Q2 2023 Non-Farm Productivity And Unit labour cost, Productivity reports measure the output of labor per hour. Since higher labor productivity leads to healthier business activity, i.e. higher economic growth, the report helps in understanding near term as well as long term GDP growth trends. Unit labor cost reports show the cost of a unit of output in terms of wages and help uncover inflationary or deflationary pressures coming from wages.
Current and scheduled economic reports, Fed statements and other releases, as well as their level of impact on stock markets, can be found on the TipRanks Economic Calendar.