U.S. Markets Outlook: Data Dump, Earnings Season, and Trade Deals in Focus

US markets face a data dump and earnings season, while trade deals materialize ahead of the August 1 tariff deadline. Market sentiment improved with gold prices rising.

US markets are gearing up for a week filled with significant data releases, earnings season, and trade deal announcements as the August 1 tariff deadline approaches. Market sentiment has improved, with gold prices rising, despite the lack of concrete details on trade agreements.

The week began with the US announcing a trade deal with Japan, which includes substantial investments in the US. However, Japanese officials and US officials have differing views on the deal, with Japanese officials stating that the US will secure only 90% of profits from joint investments with Japan if it takes on a proportional amount of risk and financing. This suggests potential cracks in the trade deal between the two allies [1].

Market participants remain cautiously optimistic, with Wall Street and the dollar strengthening on Friday as investors prepared for the upcoming week. All three major indexes were slightly up in early trading and set to end the week with gains. Global investors also snapped up a net $8.71 billion worth of equity funds during the week, reversing a $4.4 billion net withdrawal in the prior week [1].

The dollar index rose 0.28% to 97.72, while the euro fell 0.2% to $1.173. Against the yen, the dollar gained 0.4%, reaching 147.57. Cryptocurrencies such as bitcoin and Ethereum also saw declines, with bitcoin dropping 3.08% to $115,133.22 and Ethereum falling 2.63% to $3,641.43 [1].

Oil prices dipped as investors considered global demand and a possible supply increase from Venezuela. US crude fell 0.56% to $65.63 per barrel, and Brent dropped 0.39% to $68.91. Gold prices also declined, with the stronger dollar and optimism over US-EU trade talks reducing demand for the safe-haven metal. Spot gold fell 0.93% to $3,336.52 an ounce [1].

Earnings season has been positive so far, with a third of S&P 500 companies reporting earnings, with 80% beating expectations. Analysts now predict second quarter earnings will grow 7.7% compared to the 5.8% estimate from July 1. Next week, major tech companies Amazon (AMZN), Apple (AAPL), Meta (META), and Microsoft (MSFT) will release their earnings [1].

The week ahead includes several important data releases, with the US and UK releasing inflation data and key GDP data from China and manufacturing data from Japan. Asia Pacific markets are closely watching the US-China trade talks in Sweden, where a 90-day tariff ceasefire is set to end on August 12. An agreement is expected, but uncertainty remains [1].

The US will also release 2nd quarter GDP data, expected to grow 3.3%, and the Fed will make its rate decision. The Fed's preferred inflation measure, the core PCE deflator, is expected to rise 0.3% in June. NFP data on Friday is expected at 100-120k, with unemployment ticking up to 4.2% [1].

For all market-moving economic releases and events, see the MarketPulse Economic Calendar [1].

References:
[1] https://seekingalpha.com/article/4804730-markets-weekly-outlook-us-data-dump-earnings-season-trade-deals