Markets Face Potential Volatility Ahead of Federal Reserve Meeting and Earnings Season
The recent streak of gains in the markets could be at risk next week as traders prepare for a significant Federal Reserve meeting and the start of earnings season. The Dow Jones Industrial Average experienced a 10-day winning streak supported by soft inflation reports and excitement surrounding artificial intelligence. However, several upcoming catalysts could disrupt the markets.
Federal Reserve Meeting and Monetary Policy
Many investors expect the Federal Reserve to only make one more interest rate hike at its upcoming meeting. However, any unexpected moves or hawkish commentary from Fed Chair Jerome Powell could dampen investor enthusiasm. The market will closely watch Powell’s commentary for insight into the central bank’s plans.
Recession Concerns and Economic Signals
Despite the recent rally, concerns about a recession persist as traders monitor the impact of interest rate hikes and other signs of economic slowdown. While inflation is expected to decrease, a balanced approach is advised for the rest of the year.
Earnings Season and Tech Companies
The upcoming week is a crucial one for earnings season, with mixed results so far. Big tech companies like Alphabet and Microsoft will likely dominate attention, but investors should also focus on consumer giants and luxury brands to gauge consumer sentiment and price increases.
Upcoming Economic Calendar
Here are some key events and earnings reports scheduled for the week:
- Monday: Chicago Fed National Activity Index, S&P Global manufacturing PMI, S&P Global services PMI, Earnings: Domino’s Pizza, F5
- Tuesday: S&P/Case-Shiller home price index, Consumer confidence, Earnings: GE, Biogen, Danaher, GE HealthCare, GM, Alphabet, Visa, Microsoft
- Wednesday: New home sales, FOMC policy decision, Earnings: Coca-Cola, Boeing, Hess, ADP, CME Group, AT&T, eBay
- Thursday: Initial jobless claims, Durable goods orders, Second-quarter GDP, Pending home sales, Earnings: Honeywell, Hershey, McDonald’s, Mastercard, Northrop Grumman, Royal Caribbean, Enphase Energy, First Solar, T-Mobile, Ford Motor, Intel, Mondelez
- Friday: Personal Consumption Expenditure index, Consumer sentiment, Earnings: Exxon Mobil, Chevron, Procter & Gamble, T. Rowe Price
