July 29, 2019 – This week is going to be all about the Fed. Or at least, that’s how he calendar looks right now. Certainly, things not pre-scheduled can move markets, but those are significantly harder to write about ahead of time.
Tuesday will bring some spending and inflation data, but the reaction to those is going to be entirely based on how people think it will sway the central bank’s interest rate decision, which will be announced at 2:00 p.m. on Wednesday and followed by a press conference. At this point, a 25 basis point rate cut is pretty much baked in, with the next-most popular bet a 50-point cut. Anything different from that will certainly move the market. The Fed would very much like to not deliver a surprise, so our guess is that 25 is the number.
Of course, if the market gets exactly what it wants, the next game will be to analyse the accompanying remarks and documents for what the Fed will do next, so don’t expect that a cut that meets expectations will result in quiet trading for the rest of the week.
Friday’s jobs number would be a lot more exciting if it came before the Fed decision, but a big surprise in either direction could still move markets.
Otherwise, a lot of the action this week will be driven by earnings. There’s a lot of news on that front this week. So far, post earnings reactions have been pretty measured, without a lot of contagion into other names. That’s a trend we appreciate, as it means the market doing the work of separating the good companies from the bad as opposed to just buying and selling everything based on the last headline.
Economic Events this Week
The Fed meeting is the lead story this week, but as coverage shifts to the potential for future rate cuts, keep an eye on Friday morning’s July jobs report.
- 8:30 a.m. – Personal Income
- 8:30 a.m. – Personal Spending
- 8:30 a.m. – PCE Price Index
- 10:00 a.m. – Existing Home Sales
- 9:45 a.m. – Chicago PMI
- 10:30 a.m. – EIA Crude Oil Inventories
- 2:00 p.m. – FOMC Rate Decision
- 10:00 a.m. – ISM Manufacturing Index
- 8:30 a.m. – Nonfarm Payrolls
- 8:30 a.m. – Avg. Hourly Earnings
- 8:30 a.m. – Unemployment Rate
- 8:30 a.m. – Average Workweek
Earnings Reports this Week
Earnings season continues onward, with Apple (AAPL) on Tuesday afternoon and the major energy companies reporting towards the end of the week.
- Before the bell: MA, PG, PFE, MRK, MO
- After the bell: AAPL, AMGN, GILD, MDLZ, CELG
- Before the bell: GE, AMT, ADP, CME, D
- After the bell: QCOM, MET, VRTX, PRU, OXY
- Before the bell: RDS.A, VZ, CI, SPGI, GM
- After the bell: EOG, SQ, ED, MSI, MPLX
- Before the bell: BRK.B, XOM, CVX, TM, PBR
Strong Sectors past Month
These sectors are up 5% or more in the last 20 trading days:
- Junior Gold Miners
- Gold Miners
Weak sectors past month
These sectors are down 5% or more in the last 20 trading days:
- Oil & Gas Exploration
- Oil Services
Strong sectors past five trading days
These sectors are up more than 3% in the last five days.
- Regional Banking
Weak sectors past five trading days
These sectors are down more than 3% in the last five days.
- Oil & Gas Exploration