The week ahead – Will strong earnings put markets in a better mood?

A cooler US inflation reading and strong bank earnings releases weren’t enough to offset the nervousness, for which there have been several catalysts.

Most equity markets were soft with the S&P 500 in the US falling 1.6%, Japanese shares down 2.9% and emerging market equities 4.1% lower. Closer to home, the ASX 200 in Australia fell 0.1% and the NZX 50 slipped 0.7%

Turning to the week ahead, flash purchasing managers’ indices (PMIs) for July will be the key economic releases on the global calendar, and these will provide an important pulse check about how the world’s major economies are tracking.

Markets will also be watching the European Central Bank decision on Thursday (no change expected), while in the UK Andy Burnham will officially become the country’s new prime minister on Monday.

Across the Tasman, Thursday’s labour force report will be a highlight of the week, while in New Zealand the latest quarterly inflation reading will take centre stage.

It will be a busy week on the earnings front, with more than 80 S&P 500 companies scheduled to report. Tech will be in focus with earnings due from Alphabet, Tesla, IBM, ServiceNow and Intel in the US, SK Hynix in Asia, and SAP in Europe.

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