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Inflation Data and Earnings Deluge: Wall Street Braces for Crucial Week Ahead
16 Jul
Summary
- June CPI data release to impact interest rate outlook
- Major banks and companies reporting earnings this week
- Markets pricing in low chance of rate cut this month
This Tuesday morning, the spotlight is on the Labor Department's release of June 2023 consumer price index (CPI) data, a crucial economic indicator that will have major implications for the future of interest rates. Analysts will be poring over the numbers, which are expected to show a 2.6% year-over-year increase in prices, up from 2.4% in May.
Alongside the inflation data, Wall Street is bracing for a deluge of earnings reports from major companies this week. Banking giants JPMorgan, Citigroup, and Wells Fargo will kick off the earnings season, followed by peers like Goldman Sachs, Morgan Stanley, and Bank of America, as well as pharmaceutical leaders Johnson & Johnson and Novartis, and streaming giant Netflix.
The market's reaction to these earnings and the CPI data will be closely watched, as it could sway the Federal Reserve's decision on interest rates. Currently, markets are pricing in only a 4.7% chance of a rate cut this month, as the central bank's 2% inflation target remains elusive. However, recent share performance of the banking sector, up 37.9% since April's tariff-induced lows, suggests a brighter outlook for the industry.
