The biggest week of the earnings season will keep investors heads on a swivel with Microsoft (MSFT), UPS (UPS), Meta Platforms (META), Boeing (BA), Pfizer (PFE), Apple (AAPL), and Amazon (AMZN) just a few of the powerhouses due to report.
While the economic calendar includes updates on new homes sales, consumer confidence, durable goods, Q2 GDP and the PCE price index – the two-day FOMC meeting will be the major event of the week.
The Federal Reserve is expected to raise the target range for the federal funds rate by another 75 points to 2.25% to 2.50%, although futures trading still implies a 20% chance of a 100-point hike. Heading into the meeting, virtually every FOMC participant has stated firmly that reducing inflation is the top priority at present, but also steered away from tipping off a 100-point bazooka.
BNP Paribas reminds that the Fed’s preferred financial market recession predictor, the near-term forward spread, remains upward sloping. “Despite a massive growth deceleration this year, which may seem to indicate that the US economy is heading into a recession, a hard landing can be avoided, in our view – but its a close call,” previews the firm into the big week. Investors may end the week with a clearer view on recession risk
