In the upcoming week, all eyes will be on the United States as the release of inflation data takes center stage. The UK will also be closely watched for its gross domestic product (GDP) data, providing insights into the country’s economic performance amidst ongoing interest rate hikes. Furthermore, economic data from China, the world’s second-largest economy, could reveal signs of a recovery in inflation. These five major financial market events are integral to financial watch-keepers this week:
1. United States to release inflation data, with core CPI expected to remain high at 4.7%
On Thursday, the US will unveil inflation data for July, crucial for gauging whether price pressures are easing and if the market’s anticipation of an aggressive interest rate hike by the Federal Reserve is accurate. If inflation remains flat, it could prompt further rate increases in September. Analysts predict a slight drop in inflation to 4.7% from 4.8%, while forecasts remain steady at 0.2%. Additionally, PPI data for July, including the core annual rate, will be published on Friday, expected to slightly decrease from 2.4% to 2.3%. This week will also see several speeches from Fed officials, including Philadelphia Fed President Raphael Bostic and Atlanta Fed President Raphael Bostic.
2. Equity markets may be impacted as US stocks experience a slowdown in growth due to rising Treasury yields
Last Friday saw a drop in US stocks, marking the largest weekly decline since March, as some investors decided to cash in on profits after five consecutive months of stock market growth. The future direction of the market hinges on this week’s inflation data, particularly if it indicates a slowdown in consumer prices. It is crucial to closely monitor the trend of US Treasury yields, which recently reached their highest level this year after Fitch downgraded the US’s credit rating. Rising yields on US Treasury bonds, traditionally deemed safe investments, might put downward pressure on stocks. Furthermore, last Friday’s release of US employment data revealed moderate job growth in July. However, higher-than-expected wage growth has raised concerns about the Federal Reserve maintaining high interest rates for an extended period.
3. The UK to unveil GDP data, expected to remain stagnant
On Friday, the UK will release second-quarter GDP data, with analysts predicting minimal growth, indicating a near-stagnant economy. Preliminary data from May showed better-than-expected contraction rates, following two months of virtually no growth. Last Thursday, the Bank of England raised interest rates to 5.25%, reaching a 15-year high. This was the 14th consecutive rate increase by the Bank, and it cautioned that borrowing costs could continue to rise. The UK’s inflation rate, although slower than in other countries, remains high at 7.9% in June, the highest among major economies. Bank of England Deputy Governor Ben Broadbent has emphasized the need to maintain higher interest rates to curb inflation, even though the Bank predicts sluggish economic growth in the coming years.
4. China to release inflation data, with CPI expected to continue declining
China will publish trade and inflation data this week. On Tuesday, trade data for July will be unveiled, followed by inflation data on Wednesday. Economists anticipate a continuing decline in the consumer price index (CPI), falling from 0.0% to -0.5%. China’s annual CPI rate has consistently fallen below expectations for six consecutive months. However, analysts expect the annual rate of decline in the producer price index (PPI) to lessen from -5.4% to -4.0%. China International Capital Corporation (CICC) suggests that the PPI could hit its lowest point in July. Various factors, such as supply adjustments from the OPEC+ meeting, demand recovery, and improved US PMI, have contributed to a rise in prices for iron ore, steel, copper, and aluminum. Additionally, the decline in exports is projected to narrow, with a decrease of 9.8% compared to the previous month’s 12.4% decline. CICC believes that China’s economic growth rate in July might have slightly improved compared to June but is still significantly impacted by the downward phase of the financial cycle.
5. Germany’s industrial output data to be released
On Monday, Germany will release its industrial output data, expected to show a decline due to the global slowdown in demand, particularly from China. Germany, the largest economy in the eurozone, experienced significant stagnation in the second quarter of 2023, contrary to expectations of moderate growth. Falling purchasing power, rising interest rates, and a decline in factory orders have collectively impacted Germany’s economy.
As the financial world collectively waits for these key market events, it is essential to stay informed and well-prepared. For investors seeking high-quality stocks poised for substantial growth with low stock prices, the InvestPro stock screener is a valuable tool. This advanced platform allows for swift screening of numerous stocks, utilizing various indicators to pinpoint hidden gems. InvestingPro combines insights from Wall Street analysts and integrates diverse valuation models to help investors uncover investment opportunities and maximize returns. Unlock the potential of pro data with a seven-day free trial.
Compiler: Liu Chuan
© Reuters 5 big financial market events this week: US CPI data set for release, US stocks may slow
Investing.com – In the coming week, the eyes of the world will be on the United States, waiting for the release of inflation data from the United States. Meanwhile, UK gross domestic product (GDP) data will reveal the UK’s economic performance against a backdrop of continued interest rate rises, and economic data from China, the world’s second largest economy, could also show a recovery in inflation.
Here are five major financial market events to watch this week:
1.USAhe will publishinflationdata, expected coreCPI is still as high as 4.7%
This Thursday (10th), the US will release inflation data for July, which is expected to reveal whether price pressures are easing and whether the market’s prediction that the Fed is about to bring about its interest rate hike cycle aggressive right. Fed policymakers may still raise rates further in September if inflation data is flatter.
Analysts now expect a slight drop to 4.7% from 4.8%, while forecasts remain constant at 0.2%.
This Friday (11th), the US will also publish producer price index (PPI) data for July, with the core annual rate of PPI expected to fall slightly from 2.4% to 2.3%.
In addition, this week, several Fed officials will speak, including Philadelphia Fed President Raphael Bostic and Atlanta Fed President Raphael Bostic.
2.Rising Treasury yields weigh on equities as US stock gains slow
Last Friday (4th), US stocks fell overall and recorded the biggest weekly drop since March Some investors took profits and sold after US stocks rose for five consecutive months.
The future direction of the stock market may be influenced by this week’s inflation data, especially if the data shows that consumer prices are slowing.
Investors also need to pay close attention to the trend of US Treasury yields. After Fitch downgraded the US’s credit rating, US Treasury yields rose to new highs this year in recent days, exacerbating market anxiety.
Rising yields on US Treasury bonds, which are backed by the US government and are considered one of the safest investments in the world, could lower stocks.
In addition, US employment data last Friday showed that although the number of new jobs increased modestly in July, wage growth was again above expectations, exacerbating concerns that the Federal Reserve may hold rates high interest for a longer period of time.
3.There is UKhe will publishGDPdata, it is expected to remain almost stationary
Britain is expected to release second-quarter GDP data on Friday, with analysts expecting the economy to remain close to stagnation despite slight growth. Data for the month of May previously showed that the economy contracted less than expected, following a near standstill for the previous two months.
Last Thursday (3rd), the Bank of England raised interest rates to 5.25%, a 15-year high. This is also the 14th consecutive rate increase by the Bank of England. The Bank also warned that borrowing costs could continue to rise to some time.
Since the UK’s inflation rate reached a 41-year high of 11.1% in October last year, and the rate of decline was slower than other countries, it was still as high as 7.9% in June, the highest among major economies.
Ben Broadbent, deputy governor of the Bank of England, said that maintaining higher interest rates is the key to containing inflation for a longer period of time, although the Bank of England expects economic growth to be very slow in the next few years.
4.Chinawill also publishinflationdata,CPIlikely to continue down
This Tuesday (8th), China will release trade data and inflation data for July will be released on Wednesday (9th), with the consumer price index (CPI) expected to continue to decline.
Economists expect it to fall from 0.0% to -0.5%, after China’s annual CPI rate was lower than expected for 6 consecutive months.
However, the annual rate of PPI decline is expected to decrease, from -5.4% to -4.0%. CICC said the PPI could bottom out in July in July. year-on-year PPI growth rate by 1.3ppt Looking at the new price increase factors, July The OPEC+ meeting implemented the active adjustment of supply At the same time, demand recovered, supply cleared, and the international oil price rebounded; The domestic Politburo meeting released the signal of steady growth and growth promotion. The superimposed supply contraction and US PMI improvement, etc., iron ore, steel, copper and aluminum prices all rose…”
In addition, the decline in exports is expected to narrow, down 9.8% from a 12.4% decline in July.
Overall, CICC believes that China’s economic growth rate in July may have improved slightly compared to June, but the suspension caused by the downward phase of the financial cycle is still significant. among them, summer travel is booming, which drives the use of services and goods related to Positive offline activities; under the support of multiple factors such as economic transformation, policy support, and marginal relief from corporate profit pressure, the year-on-year growth rate of manufacturing investment can further increase; narrowing of the year -The year-on-year decline in PPI and the rebound in the year-on-year growth rate of social financing are also favorable to the growth of corporate activities Marginal expansion However, real estate investment and exports may continue to experience double-digit negative growth, especially the real estate chain, sales, land acquisition, construction and other relations under pressure, forming a continuous drag on economic growth. CPI may turn negative year after year, in mainly reflects the base effect」
5.The Euro zone’s largest economy to release industrial output data
In the euro area, on Monday (7th), Germany will release industrial output data, which is expected to fall due to the slowdown in global demand (especially demand from China).
It is worth noting that the German economy stagnated significantly in the second quarter of 2023, against expectations for moderate growth. Falling purchasing power, rising interest rates and a drop in factory orders have hit Germany, the euro zone’s largest economy, one after the other.
***
How to find high quality stocks that are expected to rise sharply but have low stock prices?InvestProstock screenerto help you. Quickly screen a large number of stocks, powerful functions include various indicators, and easily discover treasure stocks.
InvestingPro brings together the unique insights of Wall Street analysts and comprehensively integrates various valuation models to help investors uncover the clues behind each stock and maximize investment returns.
Start a seven-day free trial to unlock pro data!
***
Compiler: Liu Chuan
#big #financial #market #events #week #CPI #data #set #release #stock #market #slow #Investing.com
