London, Monday, 11 July 2022
Investors' attention will shift to business results the week that has just started in a few parts of the world, as the US second-quarter earnings season begins. In terms of macroeconomics, the US inflation rate, GDP growth rates in China and the UK, retail and wholesale pricing in India, and monetary policy choices in Canada and New Zealand will provide traders with up-to-date information on the strength of the global economic recovery.
The start of the US earnings season and the announcement of the inflation rate will take centre stage the following week. Major reports begin with PepsiCo on Tuesday, then Delta Air Lines, JPMorgan Chase, Morgan Stanley, Wells Fargo, Citigroup, and PNC Financial follow on Wednesday, Thursday, and Friday, respectively. Refinitiv predicts that the S&P 500's second-quarter earnings will increase by 5.7 percent. According to the data, yearly inflation is predicted to increase to 8.8 percent, the highest level since December 1981, driven once again by energy prices. Core inflation, however, is predicted to decline from 6 percent to 5.8 percent for a third month.
Retail sales are also predicted to increase, manufacturing production is likely to have stagnated in June, and consumer confidence in Michigan is predicted to reach a new record low this month. The NY Empire State Manufacturing Index, producer pricing, consumer inflation expectations, export and import prices, business inventories, and the NFIB Business Optimism Index are a few more crucial pieces of information.
Monthly GDP estimates from the ONS are anticipated to show that the UK economy paused in May, with manufacturing output rising somewhat after three straight months of declines and industrial production remaining flat from the previous month. The international trade balance, construction output, and the BRC retail sales monitor will all be of interest to investors.
In other parts of Europe, the German economy's reputation is expected to suffer in July as threats stem from rising energy costs brought on by its reliance on Russian natural gas supply. Other statistics include the trade balance and industrial production for the Eurozone, the wholesale prices and final inflation rates for Germany, the retail sales and international trade for Italy, and the industrial activity and unemployment rate for Turkey.
China is scheduled to release a number of brand-new economic data points this week, making it a busy one for the nation. The GDP growth for the second quarter, which is coming on Friday, will be crucial since it will show how badly growth was hampered by the protracted, strict lockdowns. During the week, there are other deadlines for retail sales, industrial production, fixed asset investments, and new yuan loans.
As well as Japan's machinery orders and the Reuters Tankan Index, investors will closely monitor India's retail and wholesale inflation as well as industrial production, Singapore's second-quarter GDP growth, and South Korea's interest rate decision.
(Source: Trading Economics // Edited by: The Decision Maker – Finance editors)