Q2 GDP prints for Britain and the US are the main macro events, while earnings season is in full swing on both sides of the Atlantic.
US & UK GDP
The first read of the second quarter growth figures for the US and UK economies are the main macro releases this week. With warnings that Brexit will result in an ever deeper economic slowdown than the post-referendum resilience has suggested, the preliminary Q2 print for the UK will be closely followed for any signs that activity is slowing down from what was already a fairly lacklustre Q1.
Meanwhile the US number has to live up to Donald Trump’s boasts of getting at least 3% annually. The fall in the dollar and Treasury yields suggests markets are already dubious about growth of this level. Fading hopes that the Trump administration will unleash economic dynamism were dealt another blow after the health bill failed to clear Congress.
Facebook, Amazon & Google Earnings
On Wall Street, earnings season continues apace with three of the biggest hitters set to report this week. Alphabet, owner of Google, will deliver Q2 numbers after the close on Monday. Q1 numbers beat expectations, with EPS coming in at $7.73 versus $7.39 expected. Expectations for Q2 are in the region of $8 a share. Facebook reports Wednesday while Amazon reports after the close on Thursday, with expectations for EPS of around $1.42.
FTSE Super Thursday
It’s a massive day for the FTSE 100 on Thursday, with a huge swathe of component companies reporting a blend of quarterly, interim and final results. With Anglo American (AAL), AstraZeneca (AZN), British American Tobacco (BAT), Diageo (DGE), Lloyds Banking Group (LLOY) Royal Dutch Shell (RDSA/B), Schroders (SDR) and Sky (Sky) all reporting, something like one quarter of the FTSE 100 by index weighting is in action.
Softer retail sales and inflation data has heaped pressure on the dollar as markets trim bets for a rate hike in December. Looking to this meeting, while no one expects the FOMC to adjust rates, there is some chatter on the street that it might look at balance sheet adjustment. As the meeting does not feature a fresh summary of Economic Projections and press conference with chair Janet Yellen, this could be a quieter FOMC than we’ve been used to this year.
Source: ETX Capital