Inflation data, JPMorgan and Delta earnings and more to watch this week
Second quarter earnings season begins this week with several major US banks set to report. The latest inflation data will be closely watched by both investors and economists.
The week’s economic data highlight will be the Bureau of Labor Statistics’ consumer price index for June on Wednesday. Economists’ consensus estimate calls for a 3% increase in overall CPI from the previous year, which would be one point less than in May. The core KPI is set at 5% year-on-year, 0.3 percentage points less than a month earlier. Both would be the lowest inflation rate since 2021. The BLS also releases the producer price index for June on Thursday.
Other data out this week will include a couple of sentiment indicators. On Tuesday, the National Federation of Independent Business will publish its Small Business Optimism Index for June. On Friday, the University of Michigan publishes its Consumer Sentiment index for July.
Monday 7/1[ads1]0
Federal Reserve reports consumer credit data for May. Total consumer credit rose at a seasonally adjusted annual rate of 5.7% in April to a record $4.86 trillion. Revolving credit, mainly credit card debt, rose 13.1%, while non-revolving credit, such as mortgages and car loans, increased 3.2%.
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Tuesday 7/11
President Joe Biden attends the 74th NATO summit in Vilnius, Lithuania, which lasts for two days.
The national association of Independent Business releases its Small Business Optimism Index for June. The consensus estimate is for a reading of 89.9, slightly higher than the May figure. The index remains entrenched near a decade low, as supply chain disruptions and labor shortages — though easing somewhat in the past year — continue to hurt small businesses.
Wednesday 7/12
The employment agency Statistics publishes the consumer price index for June. Economists estimate that the CPI will increase by 3.1% year-on-year, almost a full percentage point less than in May. The core CPI, which excludes volatile food and energy prices, rose 5%, three tenths of a percentage point less than previously. The CPI is at its lowest level since March 2021, and the core CPI since November 2021.
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Bank of Canada announces its monetary policy decision. Traders are pricing in a two-in-three chance that the central bank will raise its benchmark short-term interest rate by a quarter of a percentage point, to 5%. The BOC began this hiking cycle in the same month as the Federal Open Market Committee, March 2022, raising interest rates nine times, bringing them from 0.25% to 4.75%.
Thursday 13/7
Cintas, Conagra brands
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Delta Air Lines, Fastenal and PepsiCo announce quarterly results.
BLS publications the producer price index for June. PPI is expected to rise a scant 0.4% year-on-year, while core PPI is seen to increase by 2.5%. This compared with gains of 1.1% and 2.8% respectively in May. PPI is at its lowest level since late 2020, and core PPI since early 2021.
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Ministry of Labour reports initial jobless claims for the week ending July 8. Claims averaged 255,000 in June, the highest number since late 2021, a sign that the hot labor market may be cooling.
Friday 14/7
Earnings season for the second quarter starting with three of the biggest banks – Citigroup, JPMorgan Chase and Wells Fargo – reporting. S&P 500 earnings are expected to fall 6.8% year over year. That would mark the biggest drop since Q2 2020’s 31.6% plunge.
BlackRock, State Street and UnitedHealth Group announce earnings.
University of Michigan launches its Consumer Sentiment index for July. The consensus call is a 65.8 reading, slightly higher than June’s. Consumer expectations for inflation for the year ahead were 3.3% in June, the lowest in more than two years.
Write to Nicholas Jasinski at nicholas.jasinski@barrons.com
