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Markets This Week, 8/07-8/11, 2023: CPI Data and Earnings in Focus
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Markets This Week, 8/07-8/11, 2023: CPI Data and Earnings in Focus

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This week, markets will be focusing on the all-important Consumer Price Index (CPI) and Producer Price Index (PPI) data for July apart from the ongoing earnings season. These data points will drive the Fed’s future course of monetary policy and display how far the Fed has been successful in curbing inflation.

Economy and Markets: The Week Ahead

U.S. Markets witnessed an unprecedented slump last week owing to the unexpected rating downgrade from Fitch on August 2. Rating agency Fitch downgraded the credit rating for the United States to AA+ from AAA, citing anticipated fiscal deterioration over the next three years. This has led to a steady rise in bond yields and a related decline in stock prices. Although Treasury Secretary Janet Yellen and several other experts dismissed the downgrade as flawed, markets worldwide reacted harshly to the news.

This week, investors will be focused on the Federal Reserve’s important inflation measures: the Consumer Price Index (CPI) and Producer Price Index (PPI) datasets. The Fed closely monitors the CPI and PPI to understand the inflationary environment in the nation. Core CPI (excluding food and gas) is expected to grow by 0.2% in July and by 4.7% on an annualized basis. The inflation rate is declining, albeit slower than expected. It remains far from the Fed’s targeted 2% rate.

More than half of the S&P 500 (SPX) companies have already reported earnings for Q2 Fiscal 2023. A majority of them have reported positive earnings surprises. In this uncertain environment, investors are advised to base their decisions on trustworthy data and analysis.

Upcoming Earnings and Dividend Announcements

The upcoming week will be relatively light on earnings, not in terms of the number of companies reporting but in terms of big names from various sectors.

The most anticipated reports this week are those of pharmaceutical giants namely BioNTech (BNTX), Eli Lilly (LLY), and Novo Nordisk (NVO). In addition, there will be several important reports coming from companies in different sectors such as Tyson Foods (TSN), KKR & Co. (KKR), United Parcel Service (UPS), Warner Music Group (WMG), Under Armor (UAA), Walt Disney (DIS), and Roblox (RBLX), among others. Also, Chinese companies Li Auto (LI) and Alibaba (BABA) will publish their quarterly performances this week.

Companies’ reporting dates, consensus EPS forecasts, past data, analyst ratings, and price targets can be found on the TipRanks Earnings Calendar.

This week, Ex-Dividend dates are coming for the payouts of Las Vegas Sands (LVS), Alcoa (AA), EQT (EQT), IBM (IBM), Walmart (WMT), Shell (SHEL), Rio Tinto (RIO), Starbucks (SBUX), and Energy Transfer (ET) among others.

Companies’ Ex-Dividend and Dividend Payment dates, analyst ratings, and price targets can be found on the TipRanks Dividend Calendar.

Upcoming Economic Calendar Events

There are several very important reports scheduled to be published in the next few days:

» On Tuesday, August 8, we’ll receive the Consumer Credit report for June 2023. The report provides meaningful insight into the overall financial health of individuals and households in the U.S. In the wake of the high-interest rate scenario, the Consumer Credit data in all months so far this year has shown the resilience of the American consumer.

» On Thursday, we will see data on the Initial Jobless Claims for the week ending August 4. Further, the Consumer Price Index (CPI) data for July is due at 8:30 am. EST.  The CPI measures the change in price over time for a market basket of consumer goods and services. It is an important inflation gauge that the Federal Reserve uses to decide its forward course of monetary policy.

» On Friday, we’ll receive the Producer Price Index (PPI) data for July at 8:30 am. EST. The PPI measures the average change over time in selling prices by domestic producers of goods and services. The PPI is an important measure of wholesale inflation.

Current and scheduled economic reports, Fed statements, and other releases, as well as their level of impact on stock markets, can be found on the TipRanks Economic Calendar.

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