Investors’ attention this week will be split between the Federal Reserve’s interest rate policy meeting and an earnings report avalanche from several Big Tech companies and other economically significant firms.
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The Federal Reserve is expected to lift its policy rate by 25 basis points, bringing it to 5.5%, its highest in 22 years. While a rate hike this week is almost certain, questions remain regarding the Fed’s future moves, with increasingly more market participants counting on this rate increase to be the last one in the current economic cycle. Although there are apparent signs of slowing inflation, unemployment has remained close to record lows, and the first quarter’s GDP growth has been revised upwards significantly. While the contradicting indicators may well mean that the Fed has succeeded in bringing down inflation without pushing the economy into a recession, the policymakers will certainly be looking for proof of this hypothesis in the data emerging in the weeks until their next meeting.
Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» S&P Global Manufacturing PMI and Services PMI (preliminary) – Monday, 7/24 – these reports, released by S&P Global, are based on a large number of business executives in private sector manufacturing and services companies. Since manufacturing and services represent the lion’s share of the economy, this is an important indicator of business conditions and overall economic conditions in the United States. The PMIs are widely used to anticipate changing economic trends in official data such as GDP growth.
» Q2 2023 GDP Growth Annualized (preliminary estimate) – Thursday, 7/27 – this report, released by the U.S. Bureau of Economic Analysis, will provide an initial glimpse of the U.S. economy’s health in the previous quarter. After the first quarter’s figures were upwardly revised significantly, policymakers and investors will be especially keen to learn the details of the Q2 report. Economists expect growth to decelerate slightly from Q1’s 2% growth, penciling in a 1.8% annualized increase.
» June’s Core Personal Consumption Expenditures (Core PCE) – Friday, 7/28 – this report, published by the U.S. Bureau of Economic Analysis, reflects the average amount of money consumers spend monthly, excluding seasonally volatile products such as food and energy. FOMC policymakers use the annual Core PCE Price Index as their primary gauge of inflation. A stronger-than-expected reading could portend a possible hawkish shift in the Fed’s forward guidance.
