The week will be marked by the publication of several key macroeconomic indicators, including the PCE consumer deflator (Friday), which will be crucial in determining the direction of the Federal Reserve’s (Fed) monetary policy.
Wall Street prepares for a Monday of purchases after Friday’s losseswith the Nasdaq and S&P 500 leading the sales due to the market rotation from technology stocks to other sectors. This Monday’s session will be marked by very attentive investors to the political situation in the United States following Joe Biden’s announcement that he is withdrawing from the presidential race.
And the image of Biden in the first electoral debate against Donald Trump This has raised questions about his health, and since then, several voices within the Democratic Party have called for him to step aside so that another candidate can represent them in the November elections. Faced with a loss of support and mounting pressure, Biden decided this weekend to endorse Vice President Kamala Harris as the Democratic candidate.
“My first decision as our party’s nominee in 2020 was to choose Kamala Harris as my vice president. And it was the best decision I’ve ever made. Today, I want to offer my full support and endorsement to Kamala to be our party’s nominee this year. Democrats, it’s time to come together and defeat Trump. Let’s do it,” Biden said.
Wall Street: corporate results, political earthquake and key data
According to Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, “While Biden’s withdrawal reshuffles the electoral landscape, it does not yet materially change the expected outcome. We do not know whether Harris will be able to secure her party’s nomination and gain enough momentum in the polls to beat Trump. Early data shows Harris is the favorite to be the new Democratic nominee, but Donald Trump is still expected to win the November presidential election.”
Week will be marked by the publication of several key macroeconomic indicatorsand, including the PCE consumer deflator (Friday), which will be crucial in determining the direction of the Federal Reserve’s monetary policy and reinforcing expectations of a first rate cut in September. Also to be published are the manufacturing and services PMIs for July (Wednesday), second quarter GDP, which is expected to rise to 2% from 1.4% previously, and weekly unemployment data (Thursday).
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“Better growth combined with softer inflation would be the best-case scenario for the Fed, as it would mean the central bank is getting closer to reducing inflation without tipping the economy into recession. This should have a positive impact on stock and bond markets and could stem the tech-led sell-off in major indices,” Ozkardeskaya added.
In the business arena, the earnings season continues with the results of Tesla and Alphabet, which will be announced on Tuesday. “The vulnerability of the market will be evident in that any weak or disappointing figures from the big technology companies could translate into significant declines that would leave the market ‘touched’ for days,” commented Bankinter.
Source: Ambito
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