Weekly Macroeconomic Outlook & Investment Strategy
Macroeconomic Update – Weekly Outlook (July 23 – 27)
Markets closed with positive returns, since they had a positive start due to the strong quarterly results reported by companies along with the optimistic tine by Powell, president of the Fed.
• However, it started losing momentum as Trump stated he was considering in implementing new tariffs to Chinese goods increasing the concerns on trade wars and protectionism
- This also led to the Yuan to depreciate to new low levels
So, this contrast between solid earnings report from companies and the tension between commercial policies will guide the markets next week.
• Starting with the macroeconomic indicators, they are forecasted to have a positive tone this week.
- Among the main indicators in Europe, PMI & IFO are expected to be lower than the previous months but will hold in good levels
• On Thursday, it will be the meeting of the ECB which is expected just be transition meeting confirming the end of the conventional program of asset purchases at the end of 2018
• Regarding United States
- On Friday, GDP of the second quarter will be released which is expected to reach 4%
- Hence, this acceleration will confirm the expansive cycle
• Another fact that should support the markets is the quarterly results making this week possibly the year
- 180 companies are reporting earnings this week and the outlook is positive
- So far, regarding the ones that already have reported, have averaged a earnings growth of 20,8%, slightly above expectations
Due to these strong fundamentals both from the macro perspective and from the earnings report, trade tensions could be placed in the background.
• Nevertheless, on Wednesday Yunker and Trump are meeting.
- Yunker will meet with some proposals regarding the trade deals and tariffs on automobiles
- It will provide some hints on what is the outlook regarding the trade deals of United States with the rest
Hence, it is a week to be patient and hold the long positions in the markets since the macro and fundamentals remain strong and positive.
Markets closed with positive returns, since they had a positive start due to the strong quarterly results reported by companies along with the optimistic tine by Powell, president of the Fed.
• However, it started losing momentum as Trump stated he was considering in implementing new tariffs to Chinese goods increasing the concerns on trade wars and protectionism
- This also led to the Yuan to depreciate to new low levels
So, this contrast between solid earnings report from companies and the tension between commercial policies will guide the markets next week.
• Starting with the macroeconomic indicators, they are forecasted to have a positive tone this week.
- Among the main indicators in Europe, PMI & IFO are expected to be lower than the previous months but will hold in good levels
• On Thursday, it will be the meeting of the ECB which is expected just be transition meeting confirming the end of the conventional program of asset purchases at the end of 2018
• Regarding United States
- On Friday, GDP of the second quarter will be released which is expected to reach 4%
- Hence, this acceleration will confirm the expansive cycle
• Another fact that should support the markets is the quarterly results making this week possibly the year
- 180 companies are reporting earnings this week and the outlook is positive
- So far, regarding the ones that already have reported, have averaged a earnings growth of 20,8%, slightly above expectations
Due to these strong fundamentals both from the macro perspective and from the earnings report, trade tensions could be placed in the background.
• Nevertheless, on Wednesday Yunker and Trump are meeting.
- Yunker will meet with some proposals regarding the trade deals and tariffs on automobiles
- It will provide some hints on what is the outlook regarding the trade deals of United States with the rest
Hence, it is a week to be patient and hold the long positions in the markets since the macro and fundamentals remain strong and positive.
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