Market Digest: BJ

Summary

Monday Tee Up: Inflation, Powell, Banks This will be a busy week, with fresh inflation data being released, Fed Chairman Powell testifying before Congress, and the new earnings season kicking off with the big banks reporting. As well, Wall Street will continue to analyze the June jobs report that showed some cooling in the labor market. Last week, the Dow Jones Industrial Average was up 0.5%, the S&P 500 gained 1.5%, and the Nasdaq was higher by 2.8%. Year-to-date, the DJIA is higher by 4%, the S&P is up 17%, and the Nasdaq has popped 22%. On the economic calendar, Fed Chairman Powell will be grilled by Washington lawmakers about the state of the economy as part of his semiannual update. On Tuesday, he testifies before the Senate; on Wednesday, he moves over to the House. On Thursday, Wall Street will get new inflation data in the form of the Consumer Price Index (CPI). In May, CPI printed at 3.3% and Core CPI was 3.4%. Argus forecasts that CPI for June will be 3.1% and Core CPI will edge up to 3.5%. On Friday, more inflation data is due from the wholesale side via the Producer Price Index and Consumer Sentiment reports. On the earnings calendar, the new reporting season kicks off. On Thursday, we hear from Delta Air Lines, PepsiCo, and Conagra Brands. On Friday, major banks start to check in, with the likes of JPMorgan Chase, Citigroup, Bank of New York, and Wells Fargo all reporting. Steve Biggar, Argus’ Director of Financial Institutions Research, offers the following thoughts. ‘We expect profits from lending businesses to remain under pressure as higher interest rates continue to negatively impact loan growth, and loss provisions remain elevated in a slowing economy — meaning regional banks likely will have a tougher quarter than the larger global banks. Capital markets should be a bright spot, resulting in good profit gains for JPMorgan and Citigroup, as well as Morgan Stanley and Goldman Sachs. Fees from bond underwriting, initial public offerings, and merger & acquisition advisory have all improved after some two-years of weak activity, aided by growing confidence about the Federal Reserve’s pivot to lower interest rates and a soft economic landing.’ Last week, the June jobs report showed some slight cracks in the tight labor market. Nonfarm Payrolls printed at 206,000, slightly below the results f

Source: finance.yahoo.com