Economic & Finance Market Overview

What to expect in the market next week

next week market updates

For the next week, July 31, 2023 – August 4, 2023, traders and investors are expected to keep a close watch on the earnings season which continues with full rigour in the next week market. Earning releases are yet to be released from some of the big giants on the Wall Street such as Apple and Amazon, among several other companies. 

Next week, the market is expected to be affected by the updates regarding the labor market. Some of the releases which are on the watchlist of the traders include the Job Openings and Labor Turnover Survey (JOLTS) for June 2023, ADP’s National Employment Report and finally the July non-farm payrolls report. Apart from these crucial reports, PMI readings should also be released from S&P Global and the Institute for Supply Management (ISM). Traders and investors will also look forward to the inflation and GDP data from the Eurozone and decision on interest rates from Bank of England. 

Job openings and labor turnover survey (JOLTS) is referred to the as the monthly report prepared and released by Bureau of Labor Statistics (BLS) of US Department of Labor. In this, BLS counts job vacancies and separations, which includes number of workers who are voluntarily quitting employment. The BLS tends to conduct a survey of over 20,000 businesses and government offices. This helps in estimating the numbers of U.S. job vacancies, fresh hires, and separations which are included in the monthly jobs report. 

Calendar: Next Week Market

On Monday, July 31, 2023, companies such as Arista Networks, Republic Services Inc., ON Semiconductor Corp., Welltower Inc., Diamondback Energy, and Eversource Energy are expected to report earnings. In addition to these earnings, other key releases such as Chicago Purchasing Managers’ Index (PMI), Dallas Fed Manufacturing Index (for July), Euro Area Inflation Rate – Flash Estimate (July) and Euro Area GDP Growth Rate – Flash Estimate (for 2Q23) are expected to be released on Monday (July 31st)

Arista Networks, Inc. (NYSE: ANET) released its 1Q23 results on May 1, 2023. For 1Q23, the company saw revenues of $1.351 billion, exhibiting a rise of 5.9% in comparison to 4Q22 as well as a rise of 54.1% from the 1Q22. For 2Q23, the company expects revenue in the range of $1.350 billion – $1.400 billion, non-GAAP gross margin of ~61%, and non-GAAP operating margin of ~40%. 

On Tuesday, August 1, 2023, earning releases are expected to be floated by the companies such as Merck, Pfizer, Toyota Motor Co., Advanced Micro Devices, Caterpillar, BP, Starbucks, Uber Technologies, Mitsubishi Financial Group, Altria Group, and Marriott International. Apart from these releases, other key releases include S&P Global Manufacturing PMI – Final Reading (for July), ISM Manufacturing PMI (for July), Construction Spending (June) and (JOLTS) Report (June). 

For 2Q23, Advanced Micro Devices anticipates to post revenue of ~$5.3 billion, plus or minus $300 million. The company anticipates non-GAAP gross margin of ~50%. 

On Wednesday, August 2, 2023, the companies such as Qualcomm, CVS Health Corp., Shopify, PayPal Holdings, Equinix, Thomson Reuters Corp., Ferrari, Humana, Phillips 66, and MetLife Inc. are expected to releases their earnings reports. Apart from these, traders will keep the track of 2 important releases such as ADP National Employment Report (July) and vehicle sales (July). 

On Thursday, August 3, 2023, Apple, Amazon, ConocoPhillips, Amgen, Stryker Corporation, Booking Holdings, Gilead Sciences, Airbnb, Cigna, and Occidental Petroleum are expected to report earnings. Other key releases include S&P Global Composite PMI – Final Reading (July), Factory Orders (June), Policy meeting of Bank of England and interest rate decision, Challenger, Grey and Christmas Job Cuts (July) and ISM Services PMI (July). 

On Friday, August 4, 2023, the companies such as Enbridge Inc., NatWest Group, Sumitomo Mitsui Financial Group, Dominion Energy, and Liberty Media Corp. are expected to release their earnings. U.S. non-farm payrolls report (July) will be another release which traders and investors are likely to track.

Next week Updates about labor market 

Since traders are expected to see Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) report for June in the early next week, there are projections that job openings would have fallen to 9.5 million last month from 9.82 million in May 2023. 

On Wednesday, ADP should follow with its National Employment Report assessing growth in private sector payrolls. Expectations are for the gain of 210,000 in July, after payrolls increased by almost half a million in June 2023. This might lay the groundwork for the July non-farm payrolls report. Economists are expecting that U.S. employers were able to add 184,000 jobs this month, slightly below the gain of 209,000 in June 2023. As a result, the unemployment rate is expected to hold steady at 3.6%, which will be near to the 50-year low. 

BoE interest rate decision

Policymakers at the Bank of England (BoE) are expected to conduct their latest meeting on monetary policy in the next week. BoE is likely to increase the interest rates by a quarter of a percentage point to 5.25%. This will be the 14th consecutive rate hike since the tightening started in late 2021 in a bid to reduce inflation. As traders know, the inflation in the U.K. is still the highest in comparison to other G7 countries. UK’s inflation has not cooled as quickly as several other economies. 

Policymakers at the central bank target to raise their benchmark rate to the peak of 5.75% by 2023 end. This will set the borrowing costs to the highest level since 2007. 

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