Market dynamics driven by central bank meetings, Apple developments, and corporate earnings shape investor sentiment. This Week’s Market Sentiments Depend on Central Bank meetings, Apple developments, and Corporate earnings.
U.S. stock futures are up as the week begins, marked by significant central bank meetings, including the Federal Reserve, and key tech earnings reports. Apple is delaying the rollout of its AI features for its main products, and the European earnings season is also ongoing.
1. Futures Up Ahead of Fed Meeting and Corporate Earnings
U.S. stock futures rose slightly on Monday as the week begins with a focus on the Federal Reserve’s meeting and major corporate earnings reports. As of 04:05 ET (08:05 GMT), Dow futures were up 60 points (0.2%), S&P 500 futures gained 12 points (0.2%), and Nasdaq 100 futures increased by 70 points (0.4%). After a challenging week, especially for tech stocks, major earnings reports from Microsoft (NASDAQ: MSFT) on Tuesday, Meta (NASDAQ: META) on Wednesday, and Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) on Thursday are expected to influence market sentiment.
2. Fed at the Forefront of Central Bank Meetings This Week
Central banks are in the spotlight this week, with significant policy meetings from the Federal Reserve, the Bank of England, and the Bank of Japan. The Federal Reserve concludes its July meeting on Wednesday, where it is anticipated to maintain the benchmark interest rate at 5.25%-5.50%, unchanged since last July. However, markets are increasingly predicting a rate cut in September, especially after recent inflation data showed cooling prices. Fed Chair Jerome Powell’s remarks will be closely scrutinized for hints about future rate adjustments.
Meanwhile, the Bank of Japan will also meet on Wednesday, with growing speculation about a potential rate hike despite a sluggish economy and weak consumer sentiment. The Bank of England’s meeting on Thursday brings uncertainty over whether policymakers will implement their first rate cut since 2020. Last month, the BoE’s Monetary Policy Committee held rates steady, but the upcoming decision could be influenced by conflicting factors of service price inflation and weak growth.
3. European Earnings: Heineken and Philips Report Mixed Results
In Europe, earnings reports are making waves as the second-quarter results season progresses. Heineken (AS: HEIN) saw its shares drop 7% after missing half-year estimates and announcing a significant write-down of its 40% stake in China Resources Beer. Despite this, Heineken raised its full-year profit guidance, forecasting organic operating profit growth between 4% and 8% for 2024.
Conversely, Philips (AS: PHG) saw a 10% rise in stock value following better-than-expected second-quarter results, driven by higher earnings and restructuring benefits. Pearson (LON: PSON) experienced a 3.5% decline after reporting a drop in pretax profit, though the company remains on track to meet its full-year expectations.
4. Apple Delays AI Integration in Major Devices
Apple (NASDAQ: AAPL) is extending the timeline for incorporating its new artificial intelligence features, branded as Apple Intelligence, into its flagship iPhone and iPad models. According to Bloomberg, these AI features will now be included in the October updates for iOS 18 and iPadOS 18, rather than the initial September release. This delay comes as Apple aims to leverage AI advancements to counter slowing iPhone sales. Apple is also set to report its June quarter earnings this week, with expectations for continued declines in device sales due to market saturation and competition.
5. Crude Prices Rise Amid Middle East Tensions
Crude oil prices gained on Monday due to rising concerns about escalating tensions in the Middle East affecting global supply. Following a deadly rocket strike in the Israeli-occupied Golan Heights, U.S. crude futures (WTI) climbed 0.1% to $77.20 a barrel, and Brent crude rose 0.1% to $80.38 a barrel. The attack, attributed to Iran-backed Hezbollah, has led to retaliatory strikes by Israel and increased uncertainty about a potential ceasefire with Hamas in Gaza. Despite these tensions, crude demand outlook remains uncertain.
