Busy week ahead for central banks

The stock market continues to look strong as all three major indexes rose Monday. The S&P 500 climbed 0.4%, the Nasdaq Composite added 0.19% and the Dow Jones Industrial Average gained 0.52%. U.S. stock futures were flat on Monday night after the Dow Jones Industrial Average registered its longest winning streak since February 2017. Dow Jones Industrial Average futures inched down 12 points, or 0.03%. Futures linked to the S&P 500 slipped by 0.03%, and Nasdaq 100 futures ticked lower by 0.04%. While a stronger-than-expected earnings season has helped maintain the market rally, Wall Street is also carefully awaiting the Federal Reserve’s policy decision on Wednesday. Fed fund futures data shows a 98% probability of a quarter-point hike. Investors are waiting for Chair Jerome Powell’s statements on his outlook for the economy as it tackles inflation.   

Summary for 25.07.2023 

• The market is pricing 25 basis point hikes for the Federal Reserve and the European Central Bank, but economists will be closely scrutinizing communications on their future rate paths. 
• Major U.S. stock indexes ended Monday in the green, with the Dow Jones Industrial Average notching an 11-day winning streak. The pan-European Stoxx 600 advanced 0.06%, led by a 1.5% rise in oil and gas stocks. But business activity in the eurozone and U.K. is slowing down, according to flash estimates. 
• The dollar index fell slightly to around 101.2 on Tuesday, snapping a five-day advance as traders turned cautious ahead of the key policy decisions this week.  
• The S&P Global US Composite PMI declined to 52.0 in July 2023, down from 53.2 the previous month, as shown in a preliminary estimate. 
• The FTSE 100 rose 0.3% to 7,684 on Monday, extending gains for the fifth session after weaker-than-expected PMI data supported the case for a lower peak in interest rates. 
• Asian equity markets jumped on Tuesday as sentiment improved after China pledged to ramp up policy support for its flagging economy, with a focus on boosting domestic demand and helping the ailing property market. Hong Kong and mainland China stocks led the gains, while Australian and South Korean shares followed. Meanwhile, Japanese stocks declined amid a pullback in the technology sector. 
• WTI crude futures rose toward $79 per barrel on Tuesday, hovering near a three-month high hit in the previous session, underpinned by the prospect of tighter global supplies and stronger Chinese demand. 
• European stocks were muted on Monday after elections in Spain delivered no clear winner, and markets braced for another round of central bank meetings, along with one of the busiest weeks in the second-quarter earnings calendar.                                     
• Apple is considering raising the price of its high-end iPhone Pros when new models come out this fall, according to a Bloomberg News report. 
• TikTok launched its music streaming service this month in Indonesia and Brazil — its second and third-largest markets. It is also testing TikTok Music in Australia, Mexico and Singapore. 
• Twitter owner Elon Musk officially changed the company’s famous bird logo to an “X” on Monday as part of a sweeping rebrand.