Markets: Banks and tech lead the recovery; all eyes will also be on Warsh and inflation this week

Concerns remain over the Strait of Hormuz

(Il Sole 24 Ore Radiocor) - Inflation, Warsh and quarterly results will be the main market movers next week, but investors will still have to contend with instability in the Middle East and the renewed closure of the Strait of Hormuz. The week will begin with data, primarily from the US, including June’s inflation figures (Tuesday), “expected to show a slowdown in both headline and core inflation”, write MPS analysts in their weekly ‘Market movers’ report. Immediately after the data is released, the day will continue with the first of two hearings before Congress featuring Fed Chairman Kevin Warsh: the market will be keen to gauge whether the chairman will maintain a more dovish tone, particularly in light of the recent weakness in the labour market. Also in the US, the release of retail sales figures (Thursday) and industrial production data (Friday) will complete the picture of second-quarter GDP growth. Important data will also emerge from China: the June trade balance (Tuesday) will be of particular interest in assessing whether there has been an improvement in oil imports. Then comes second-quarter GDP (Wednesday), which is expected to show a slowdown due to domestic demand that remains rather weak. Finally, all eyes will be on the new round of quarterly results, with the major US banks (GS, BofA, JPMorgan, Wells Fargo and Citigroup) leading the way. But the focus will also be on two giants of the global tech sector: ASML and TSMC. Their results will help gauge demand for microchips, given recent market doubts about the sustainability of the rally in AI-related shares.

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