With another summer week of low trading volume and low volatility down, investors are left to ruminate on at least two themes: a relatively downbeat earnings season and seemingly indelible macroeconomic and geopolitical risk factors. The issues facing greater Europe as Greek bailout negotiations move forward remain at the forefront in currency- and fixed-income markets investors minds, as does the Federal Open Market Committee announcement this coming week, which might provide more insight into timing for an inevitable hike.
Monday, July 27: Long-term allocators working to decipher euro-zone prospects will be keeping an eye on private-sector loan data from the European Central Bank. In May, the measure registered a year-over-year expansion for the first time since 2012. Slow growth of private-sector lending, particularly to small businesses in weaker economies, has weighed heavily on the minds of many analysts attempting to gauge the strength of green shoots. After a jump in June, consensus expectations are for further advances.
Tuesday, July 28: In a week filled with earnings reports from a number of global pharmaceutical giants, including Bayer, Amgen and GlaxoSmithKline, Merck & Co.s quarterly earnings report is a standout. Brokerage analysts anticipate that it will be among the pharma companies most negatively impacted by a resurgent U.S. dollar.
Wednesday, July 29: The policy announcement from the FOMC is likely to dominate fixed-income market sentiment. Investors will be parsing commentary for a signal of when the first hike will occur. While benchmark rates remain unchanged for now, the St. Louis Federal Reserve reports that as of June, average U.S. 30-year mortgage interest rates have risen to 3.98 percent versus 3.67 percent in April as lenders try to get ahead of the central bank.
Thursday, July 30: Both the worlds largest brewer, Anheuser-Busch InBev and Diageo, the largest producer of high-proof spirits, report results for the second quarter of calendar 2015. Investors in London-based Diageo were put on edge this past Thursday when media reports surfaced that the SEC is looking at the possibility that the firm intentionally overshipped product to boost sales figures.
Friday, July 31: Anticipated Paramount summer blockbuster Mission: Impossible Rogue Nation, starring Tom Cruise opens for wide release. Also on deck for the weekend is a number of more commercially modest debuts, including The End of The Tour, which recreates a five-day conversation in 1996 of between writer David Foster Wallace and Rolling Stone reporter David Lipsky, played by Jesse Eisenberg, just after Wallaces novel Infinite Jest garnered international acclaim. Wallace, who died in 2008, is played by comedian and writer Jason Segel in what was an initially controversial casting choice that has since won over critics.
Saturday, August 1: More than half a million motorcycle enthusiasts are expected to crowd into Sturgis, South Dakota, for the 75th annual Sturgis Motorcycle Rally, which officially kicks off August 3. With a population of under 7,000, Sturgis economy is dominated by the weeklong event, complete with a temporary tent city with restaurants and nightclubs. In the wake of a shooting at a May bike rally in Waco, Texas that left nine people dead and 18 more injured, the Sturgis event will likely have beefed-up security. With regard to the Waco rally, questions have arisen over the majority of the charges initially brought against the more than 170 attendees arrested in connection with the violence.