Investors have another heavy earnings week ahead as we also await the latest Unemployment Rate and Average Hourly Earnings figures. Additionally, on the economic front, we have Personal Spending, Pending Home Sales and Challenger Job Cuts.
Earnings: Earnings had their heaviest week last week, so it’s all down here from here. We still have a heavy week with 133 S&P 500 companies and 2 Dow components this week. Traders will continue to see individual stocks have huge price swings if a company’s earnings outpaces or fall short of what the street expected. According to Thomson Reuters I/B/E/S, we have now seen 58% of S&P 500 companies report 2nd quarter earnings so far. Of them, 71% reported revenue above expectations while 73% have reported earnings above expectations.
Non-Farm Payrolls & Unemployment Rate: Non-Farm Payrolls, the Unemployment Rate and Average Hourly Earnings for July are scheduled to be released this Friday (8/4). Should the figure show that the economy created more jobs than expected, or if average hourly earnings jumped higher, we will likely see the markets go higher, the US Dollar go higher and oil go lower. Should these numbers disappoint, the markets will likely go lower along with the US Dollar. As we’ve seen time and again with these figures, the Unemployment Rate may drop but average hourly earnings will continue to stagnate as another part time worker at Amazon will only be paid minimum wage until a robot can do it for cheaper.
Bank of England: The Bank of England is scheduled this week to publish its policy decision, Inflation Report Official votes and new forecasts or as they call it, Super Thursday (cause their Super, thanks for asking). The Bank of England Governor will also give us his latest outlook and if they will be raising interest rates. With significant uncertainty around the impact of Brexit on the UK’s economy, investors will likely not see any changes and will continue the wait and see approach.
So Many PMI readings: PMI readings from across the globe are due out this week. Traders will watch these readings as potential weak readings could cause central banks to take further steps to stimulate their respective nation’s economies.
Chinese Data: This week, China will be releasing Manufacturing PMI Non-Manufacturing PMI and Caixin Service PMI. Investors will monitor the data and the Yuan’s reaction as strong data will put upward pressure on the currency, with the potential for markets to rise globally.