In the new trading week, monetary policy developments in the US and lingering Middle East risks are likely to remain central discussion topics. At the same time, the AI euphoria could once again be put to the test. Last Wednesday, the Dow Jones Industrial Average Index had still marked a record high at over 53,700 points. Now it could become apparent whether the upward trend is on a sustainable foundation or whether the record high was based on overly optimistic expectations. The latest record is thus likely to prove to be a potential stress test.
In a comparatively manageable economic data calendar, the Fed minutes in the middle of the week stand out in particular. The upcoming US earnings season could also cast its first shadows.
Purchasing managers to predict at the start of the week - Fed minutes in focus on Wednesday - Investors likely to hope for monetary policy clues
The ISM Services Purchasing Managers' Index is already on the schedule (4:00 PM).
Mid-week, the minutes of the latest Fed meeting (FOMC Minutes) will be on the agenda (8:00 PM). In this context, investors are likely to expect important clues about the future direction of U.S. monetary policy.
In just 23 days (07/29), the US Federal Reserve is scheduled to decide on the future level of its key interest rate. The CME Group's „Fed Watch Tool“ currently indicates that 75.9 percent of market participants expect an interest rate pause, while 24.1 percent expect an interest rate hike totaling 25 basis points.
Weekly U.S. jobless claims and Fed officials ahead
On Thursday afternoon, the weekly initial jobless claims in the US must also be observed.
Due to the holiday, the official US labor market data for the month of June was published last Thursday. Outside of US agriculture, only 57,000 new jobs were created, which is significantly less than Reuters-polled economists had expected (110,000).
The latest jobs report likely gave investors reason to believe the Fed might pause its impending interest rate hikes.
Potentially, there could also be monetary policy guidance from Fed representatives from time to time, which is anticipated by the public.
On Thursday at 3:00 PM, John Williams of the Federal Reserve Bank of New York is expected, and at 7:30 PM, Lorie Logan (Dallas Fed) is expected.
US earnings season is likely already casting its shadow.
Furthermore, investors are likely eagerly awaiting the start of the earnings season. On Thursday, for example, PepsiCo's (ISIN: US7134481081) figures for the past fiscal quarter are expected, and on Friday, Delta Air Lines' (ISIN: US2473617023) figures are expected.
Traditionally, the major US banks give the "go-ahead" next week. On Tuesday (July 14th), Bank of America (ISIN: US0605051046), Citigroup (ISIN: US1729674242), Goldman Sachs (ISIN: US38141G1040), JPMorgan (ISIN: US46625H1005), and Wells Fargo (ISIN: US9497461015) will report.
Dow Jones Industrial Average Index
