There is a lot on for the US this week – tensions with China, a Fed statement, Q2 GDP reading and earnings from Apple, Alphabet, and Amazon. Oh, and covid-19.
US: Tensions with China and earnings season in full swing
Now that Beijing has responded to the closure of the Chinese consulate in Houston by shutting down the American consulate in Chengdu, investors have been forced to contend with the possibility of a re-escalation of tensions between the two superpowers. Especially with November’s election on the horizon – China-bashing is one of Trump’s favourite distraction tactics.
It is one of many narratives the markets will be keeping an eye on this week, beyond the regular covid-19 analysis.
Another thing for US investors to deal with is Wednesday’s Federal Reserve rate vote and press conference. The central bank isn’t expected to unveil any new stimulus on the 29th, though the phrasing of its statement may give an indication of when they are preparing to act next.
In terms of data, the most important figure arrives on Thursday, as the markets get their first taste of America’s second quarter GDP performance. Following a 5% contraction in Q1 (at the annualised rate), analysts are forecasting – brace yourselves – a 35% collapse in Q2.
Elsewhere, the durable goods orders readings are released on Monday, with CB consumer confidence on Tuesday, pending home sales on Wednesday, jobless claims on Thursday, and the core PCE price index and Chicago PMI on Friday.
US: Stocks to watch
If that wasn’t enough, the week’s earnings calendar is unbelievably stacked. Boeing is up on Monday, with McDonald’s, eBay, Starbucks and Visa on Tuesday, and General Motors, General Electric and Facebook on Wednesday.
Then, on Thursday, the world’s biggest companies collide, as Apple, Alphabet and Amazon all reveal their latest results.
For Apple’s third quarter performance, analysts are looking for an 8.7% drop in earnings to $1.99 per share, with a 5% decline in revenue to $51.13 billion.
As for Google-parent Alphabet, it might be another battle between rising engagement and falling ad revenue. Estimates point to a huge 40.7% decline in earnings to $8.43 per share, alongside a milder 3.3% dip in revenue to $30.66 billion.
Finally, Amazon – arguably the company to benefit most from the pandemic – is expected to see a 27.5% surge in revenue to an eye-watering $80.84 billion, but with earnings per share down 74% to $1.34. That’s due to covid-19 related costs, from dealing with increased demand to keeping employees ‘safe’ (something Jeff Bezos isn’t exactly known for).
UK: A busy week on the corporate calendar
The end of July is nearly data-free for the UK, making the FTSE susceptible to the market’s wider movements. Friday morning’s Chinese manufacturing and services PMIs could impact trading in the UK, given the FTSE’s commodity base.
UK: Stocks to watch
Luckily it is a bit more exciting on the corporate front. Greggs report on Tuesday, with a stacked Wednesday then featuring Aston Martin, Rio Tinto, Smith & Nephew, Taylor Wimpey and Next. AstraZeneca, BAE Systems, Rentokil Initial and Shell release on Thursday, with Rightmove closing the week out on Friday.
Eurozone: GDP reading
The big figures in the Eurozone come towards the end of the week, with the preliminary Q2 GDP reading out of Germany on Thursday, and the GDP numbers from France, Spain, Italy and the region as a whole on Friday.
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