Monday's Market Minute: Risk-Off To Begin The Week…

Let’s take a market minute to get ahead of what you should be keeping an eye on.

We have four major focal points to begin the last week of July: earnings, economic data, the FOMC, and U.S. indices which continue to hold at or near all-time highs. First, in terms of earnings, we have 170 S&P 500 companies reporting quarterly results; keep an eye on Tesla TSLA, Apple AAPL, Microsoft MSFT, Alphabet GOOGL, Starbucks SBUX, and UPS UPS, to name a few. Last week, we saw investors’ confidence get a boost from better-than-expected quarterly results, which helped investors shrug off COVID delta variant concerns. Companies reporting this week will provide further insight as to some of the consumer trends we’ve been seeing. Also, investors will be listening to CEO comments related to inflation and labor conditions.

As far as economic data, this week the focus will be on New Home Sales, Durable Goods Orders on Tuesday, GDP on Thursday, and Personal Income and Spending on Friday. But don’t forget about the Fed meeting. The two-day policy meeting begins tomorrow, and on Wednesday the FOMC will announce its policy decision. We oftentimes see intraday volatility tied to the Q&A session that follows. Fed Chair Jerome Powell will definitely be asked about inflation, rates on the decline, and labor. While many expect policymakers to leave rates unchanged, the focus is on potential taper comments and how we may have to wait for the Jackson Hole summit this fall before we hear mention of assets purchases being cut. The Fed continues to weigh the risks of inflation on the rise, and the potential impact of delta variant concerns on the economic recovery.

We also have U.S. indices at or near all-time highs to begin the week and certainly one of the major focal points for investors. We continue to wait to see if the Dow and the Russell, which continue to lag, will eventually join in. Last week, the S&P 500 and the Nasdaq futures both saw new all-time highs while large-caps and small-caps alike have yet to join in.

Lastly, U.S. relations with China, infrastructure talks, and U.S. rates on the decline will also be on traders’ minds and potentially impacting markets, so stay dialed in and tuned in; it could be another wild ride.