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Vladimir Zernov
U.S. Stock Market

The Earnings Season Begins

Finally, the stock market optimism will be tested by quarterly earnings data from U.S. – listed companies. This week marks the real start of the earnings season.

The most interesting reports will come from banks whose stocks were hit hard by the coronavirus pandemic. This week, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs and Morgan Stanley will provide their second-quarter results.

Most likely, the market will focus on the banks’ earnings outlook since the second-quarter is expected to look bad.  For example, Citigroup’s earnings are expected to decline from $1.06 per share in the first quarter to just $0.27 per share in the second quarter.

While traders wait for the upcoming earnings reports, S&P 500 futures are gaining ground in the premarket trading session, and the U.S. stock market is set to continue its upside trend.

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China Announces Sanctions Against U.S. Senators

In the previous week, the U.S. has sanctioned high-ranked Chinese officials for alleged human rights abuse against Uighur minority in China. China promised to introduce counter-measures but did not provide any details about such measures at that time.

Today, these counter-measures were revealed. China decided to announce sanctions against U.S. Senators Marco Rubio and Ted Cruz. U.S. Representative Chris Smith as well as U.S. Congressional-Executive Commission on China were also put on sanctions list.

This move marks another increase in U.S. – China tensions which have unnerved the market for quite some time. While these sanctions will not have a direct impact on day-to-day business life, they show that both U.S. and China are ready to take new steps in their battle against each other, which is a major risk factor as the world economy tries to recover from the hit dealt by the coronavirus pandemic.

Inflation Is Expected To Return Back Into The Positive Territory

Tomorrow, the U.S. will provide Inflation Rate and Core Inflation Rate reports for June.

Inflation Rate is expected to grow from -0.1% to 0.5% on a month-over-month basis as consumer activity increased.

Any weakness in Inflation Rate will likely be interpreted as a sign that consumers are still anxious about their financial perspectives and that more stimulus is needed to improve the situation.

For a look at all of today’s economic events, check out our economic calendar.

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