Last week, geopolitical issues were the main focus of traders. This week, the focus will turn to economic data and some geopolitical news.
After making news the entire week, Donald Trump will continue being the headliner for the week. Today, he will meet with his counterpart from Russia in Helsinki, Finland for what is expected to be a major meeting between the two leaders. The meeting comes two days after the US justice department released an inditement for 12 Russians who are accused of hacking the Democratic server during the 2016 election. The president is expected to ask Putin whether his country was involved in the hacking.
China GDP Data
Today, the Chinese government is expected to release the GDP numbers for the second quarter. This will be the first reading of the numbers and is expected to show that the economy grew by an annualized rate of 6.8%, which will be higher than last quarter’s 6.2%. On a QoQ basis, the economy is expected to have grown by 1.6%, which is higher than Q1’s 1.4%. China, being the world’s second largest economy is used by traders as a barometer of how the world economy is doing.
Consumer Price Index (CPI) is one of the most closely followed economic data in the world because it shows the movements of consumer prices. Traders use the data as an indicator of how inflation is doing. This week, several key countries will report on the consumer prices. On Tuesday, New Zealand will kick off the CPI numbers. Traders expect the CPI for the second quarter to grow at 1.6%, which is higher than Q1’s 1.1%. On Wednesday, we will get the CPI numbers for the United Kingdom. We expect the CPI to have grown by an annual rate of 2.6%, which will be higher than the previously-reported 2.4%. On the same day, we will get the CPI numbers for the European Union. We expect that the CPI rose at an annual rate of 2.0%, which is the same as the previously released numbers. On Friday, we will get the CPI numbers for Canada. Traders expect the numbers to show that the CPI rose at an annual rate of 2.3%, which will be higher than last month’s 2.2%.
On Friday, the earning season started officially with mixed results from Citi, JP Morgan, and Wells Fargo. This week, other large companies are expected to report. Today, Bank of America and Netflix are expected to report. On Tuesday, Goldman Sachs, CSX, Johnson & Johnson, Omnicon, and Charles Schwab will report followed by Abbot, Alcoa, Kinder Morgan, eBay, and Morgan Stanley on Wednesday. On Thursday, ABB, Microsoft, and SAP will report followed by General Electric and State Street on Friday.
While there will be no major speech or data from the Federal Reserve, the chair, Jerome Powell will be a focus this week. He is expected to testify before senate and congress on Tuesday and Wednesday. In the testimony, he is expected to talk about the second quarter and what he expects to happen in the third quarter. This meeting will provide a context of what the officials will do in the next meeting.