While many traders are away from their desks on summer vacation, the calendar remains quite busy and the data highlight this week will be the flash PMIs for July on Friday according to DB's Jim Reid, and initial jobless claims on Thuesday while earnings season picks up a bit more, with 88 releases from S&P 500 companies including IBM, Coke, Tesla, Twitter, Intel and Verizon, as well as another 76 from the STOXX 600.
For the flash PMIs for July, the highlight will be whether US progress has stalled given the increased spread of the virus over the last few weeks. In terms of expectations the US numbers are expected to tick up from the high 40s to the 51-52 range. In Europe there is more of a spread but the composite is expected to be at 51. It will be interesting to see if the European numbers can edge ahead of the US given the clearer run of reopenings. However Europe did see lower troughs and could have more scarring as a result. We will see over the months ahead as to whether the US - that didn’t ever totally lockdown - will see that offset by not fully controlling the virus.
Speaking of the US, another data highlight of note will be the weekly initial jobless claims for the week through July 18. Last week it fell by a smaller-than-expected -10k to 1.3m, which is the smallest weekly decline since they reached their peak back in late March, raising concerns over the speed of the labour market recovery. Over in Europe, another release will be the European Commission’s advance consumer confidence indicator for July (Thursday). The last couple of months have seen a rebound from its April low, but it still remains well below its levels at the start of the year, so it’ll be interesting to see if this upward momentum is sustained.
Earnings season moves into full flow this week, with 88 releases from S&P 500 companies and another 76 from the STOXX 600. In terms of the highlights to look out for, today we have IBM. Then tomorrow, that’s followed by Novartis, The Coca-Cola Company, Texas Instruments, Philip Morris, Lockheed Martin and UBS. Then on Wednesday, we have Microsoft, Thermo Fisher Scientific and Tesla. Thursday sees Roche, Intel, AT&T, Unilever, Union Pacific, Daimler, Twitter and Hyundai release earnings. Finally on Friday, we’ll hear from Verizon, NextEra Energy, T-Mobile and American Express.
It’s a quieter week on the central bank front, with Fed speakers now in their blackout period ahead of next week’s meeting. However, we will get decisions from some EM central banks, including Turkey and South Africa on Thursday and Russia on Friday. Otherwise, the Bank of Japan will be releasing the minutes of their June meeting today, and we’ll also hear from the BoE’s Haldane, Tenreyro and Haskel this week.
Courtesy of Deutsche Bank, here is a ay-by-day calendar of events:
- Data: Japan June trade balance, Germany June PPI, Euro Area May current account balance
- Central Banks: BoJ release minutes from June meeting, BoE’s Haldane and Tenreyro speak
- Earnings: IBM
- Data: Japan June nationwide CPI, final June machine tool orders, UK June public sector net borrowing, Canada May retail sales, US June Chicago Fed national activity index
- Earnings: Novartis, The Coca-Cola Company, Texas Instruments, Philip Morris, Lockheed Martin, UBS
- Data: Preliminary July manufacturing, services and composite PMIs for Japan, US weekly MBA mortgage applications, May FHFA house price index, June existing home sales, Canada June CPI
- Earnings: Microsoft, Thermo Fisher Scientific, Tesla
- Data: Germany August GfK consumer confidence, France July business confidence, US weekly initial jobless claims, June leading index, July Kansas City Fed manufacturing index, Euro Area advance July consumer confidence
- Central Banks: Monetary policy decisions from the Central Bank of Turkey and South African Reserve Bank, BoE’s Haskel speaks
- Earnings: Roche, Intel, AT&T, Unilever, Union Pacific, Daimler, Twitter, Hyundai
- Data: Preliminary July manufacturing, services and composite PMIs for Australia, France, Germany, Euro Area, UK and the US, UK June retail sales, Italy July consumer confidence, US June new home sales
- Central Banks: Monetary policy decision from the Central Bank of Russia
- Earnings: Verizon, NextEra Energy, T-Mobile, American Express
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Focusing on just the US, Goldman notes that the key economic data release this week is the jobless claims report on Thursday. There are no scheduled speaking engagements from Fed officials this week, reflecting the FOMC blackout period.
Monday, July 20
- There are no major economic data releases scheduled.
Tuesday, July 21
- There are no major economic data releases scheduled.
Wednesday, July 22
- 09:00 AM FHFA house price index, May (consensus +0.3%, last +0.2%)
- 10:00 AM Existing home sales, June (GS +21.5%, consensus +22.8%, last -9.7%): After falling 9.7% further in May, we estimate that existing home sales rebounded by 21.5% in June. Existing home sales are an input into the brokers' commissions component of residential investment in the GDP report.
Thursday, July 23
- 08:30 AM Initial jobless claims, week ended July 18 (GS 1,250k, consensus 1,293k, last 1,300k): Continuing jobless claims, week ended July 11 (consensus 16,900k, last 17,338k): We estimate initial jobless claims declined but remain elevated at 1,250k in the week ended July 18.
- 11:00 AM Kansas City Fed manufacturing index, July (consensus +5, last +1)
Friday, July 24
- 09:45 AM Markit Flash US manufacturing PMI, July preliminary (consensus 52.0, last 49.8)
- 09:45 AM Markit Flash US services PMI, July preliminary (consensus 51.0, last 47.9)
- 10:00 AM New home sales, June (GS +5.0%, consensus +3.6%, last +16.6%): We estimate that new home sales increased by 5.0% in June, reflecting higher permits and mortgage applications.
Source: Deutsche Bank, Goldman, BofA