The market is currently struggling to find a clear direction, caught between corporate balance sheets and global politics. The situation in the Middle East remains the decisive risk factor for the markets. As long as a clear compass is missing, stock markets are likely to remain in their rocking motion, keeping investors on tenterhooks.
The earnings season could give the markets a possible breather. But as long as geopolitical risks set the pace, optimism is likely to remain a fragile companion. In focus, in addition to renewed US price data, are various corporate figures from the United States.
DAX
Naval blockade against Iranian ports in effect again – US launches further attacks on Iranian targets
The uncertain situation in the Iran conflict is likely to continue to concern investors. The U.S. military has reinstated a naval blockade against Iranian ports and again attacked targets in Iran. This marks the fourth consecutive night that the United States has carried out airstrikes. After a supposed period of calm in the Middle East, market participants must once again contend with geopolitical risks.
US Producer Prices and Kevin Warsh Could Provide Monetary Policy Impetus
This afternoon, investors will be focusing on the US producer price index (2:30 PM), which will be scrutinized for monetary policy clues.
US inflation data for June, released on Tuesday, came in significantly weaker than expected at 3.5 percent (year-over-year) compared to the anticipated 3.8 percent, following 4.2 percent in May. This development could have favored the lingering interest rate concerns.
According to the CME Group's „FedWatch Tool,“ 83.4 percent of market participants currently expect an interest rate pause at the upcoming meeting on July 29, and 16.6 percent expect a quarter-percentage-point rate hike. A week ago, 31 percent were still expecting a corresponding increase in interest rates.
Further speech by Fed Chairman Kevin Warsh expected before US House of Representatives
Also on Tuesday, Fed Chairman Kevin Warsh is scheduled to speak before the U.S. House of Representatives (4:00 PM).
On Thursday, US retail sales will be in focus (2:30 PM).
Preliminary consumer sentiment data (Uni Michigan) at 4:00 PM will round out Friday from an economic calendar perspective.
US earnings season gaining momentum – impulses also conceivable here at home
Investors are also eagerly awaiting further corporate earnings from the United States, which are also likely to be heard in Frankfurt am Main.
Today, results for the past business quarter are expected from BlackRock (ISIN: US09290D1019), Johnson & Johnson (ISIN: US4781601046), and Morgan Stanley (ISIN: US6174464486), as well as from Netflix (ISIN: US64110L1061) on Thursday.
