For additional hints about the state of the economy and a slowdown in inflation, this week’s main focus will be on the consumer price index inflation data, which is anticipated on Wednesday. It is anticipated that the reading will have slightly decreased in July compared to June, a pattern that would probably increase enthusiasm about reduced interest rates.Â
Amidst increasing indications of a slowing U.S. economy, the Federal Reserve is anticipated to start reducing interest rates in September. However, investors disagree on whether the U.S. central bank will approve a 25 basis point or 50 basis point reduction.
The Fed has indicated that it does not need to see inflation hit its 2% annual target before it starts to reduce rates, and that any further positive economic data will pave the way for a September rate cut.
In a recent report, Morgan Stanley (NYSE:MS) stated that “overall, inflation data pose a two-way risk: a high reading could prompt fears of stagflation, while a low print could give more breath to the hard landing narrative,” but it also stated that it expected the inflation trend to continue.
Earnings season concludes
Although the quarterly earnings season has largely concluded, there are still some earnings scheduled for this week. Home Depot (NYSE:HD) and Cisco Systems (NASDAQ:CSCO) are scheduled to release their results in the coming days.
According to Factset, of the 91% of S&P 500 businesses that have reported earnings for Q2 so far, over 78% have reported a positive EPS surprise, indicating that the earnings season has been largely good.
Starbucks Corporation (NASDAQ:SBUX) saw a 2% increase in value following a Bloomberg report indicating that the coffee giant is in the final stages of negotiations to award Elliot Investment Management a board seat. Elliot has been advocating for improvements at Starbucks in order to boost output.
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