"Wall Street Anticipates Major Fed Decision and Key Earnings, Riding High into Next Week"

Market Gains in Jeopardy as Traders Brace for Fed Meeting and Earnings Season The recent streak of gains in markets could be in jeopardy next week as traders come up against a big Federal Reserve meeting and earnings shift into high gear. The Dow Jones Industrial Average is set to close out a 10-day winning streak on Friday as some soft inflation reports this month, and excitement around artificial intelligence, continue to support the bull case for equities. However, markets are ramping up just ahead of several catalysts next week that could roil markets. Federal Reserve Meeting and Hawkish Commentary Many investors are anticipating the Fed will be "one and done" after its policy meeting in the week ahead, but a surprise move by the central bank or any hawkish commentary from Fed Chair Jerome Powell could potentially throw cold water on recent investor enthusiasm. "Our over interpreting the statement and the press conference may well cause some agita in markets," said Art Hogan, chief market strategist at B. Riley Wealth Management. Rate Hike and Future Monetary Policy Wall Street is anticipating a quarter percentage point rate hike at the conclusion of the Fed's meeting on Wednesday, but more unclear is what the central bank will do in September. According to the CME FedWatch Tool, 83% of traders expect monetary policymakers will be done at that point. Instead, market participants will closely watch commentary from Powell on Wednesday to get a better gauge for what the central bank will do as it tries to navigate a soft landing. Many anticipate that Powell won't diverge much from the narrative, possibly citing the strength of the labor market or the consumer, in the central bank's ongoing fight against inflation. Earnings Season and Margin Compression The biggest week for earnings season is also up ahead, with results having been mixed thus far. Of the 89 companies in the S&P 500 that have reported, 75% have posted positive surprises. According to The Earnings Scout, that performance is below the three-year average of 80%. However, traders will get a clearer picture into the state of corporate America next week, where they will keep an eye on sales growth for companies. Tech Giants and Consumer Giants Big Tech companies such as Alphabet and Microsoft are on deck on Tuesday, and will likely steal the thunder from other reports. However, investors should also keep an eye on the consumer giants or luxury consumer names for insight into how shoppers are digesting price increases. Upcoming Events Next week's calendar includes important economic indicators such as the Chicago Fed National Activity Index, S&P Global manufacturing and services PMIs, S&P/Case-Shiller home price index, consumer confidence, new home sales, FOMC policy decision, initial jobless claims, durable goods orders, second-quarter GDP, pending home sales, personal consumption expenditure index, and consumer sentiment. In conclusion, the upcoming Federal Reserve meeting and earnings season are key factors that could potentially disrupt the recent market gains. Traders will be closely watching for any surprise moves or hawkish commentary from the Fed as well as scrutinizing the performance of companies during earnings season. Conclusion: Potential Impact on a New Business The current environment of market uncertainty presents potential challenges for new businesses seeking to establish themselves in the market. The upcoming Federal Reserve meeting and earnings season could disrupt the recent market gains and create additional hurdles for emerging enterprises. The outcome of the Federal Reserve meeting holds significant implications for new businesses. Any unexpected moves or hawkish commentary from the central bank could dampen investor enthusiasm and lead to market volatility. This could make it more difficult for new businesses to raise capital or attract investment during a period of heightened uncertainty. Additionally, the earnings season represents a crucial time for new businesses to assess the state of corporate America. Mixed results thus far suggest that the business landscape may not be as robust as expected. New businesses should closely monitor sales growth trends in their respective industries to gauge consumer sentiment and adapt their strategies accordingly. Furthermore, the performance of tech giants and consumer giants should be of particular interest to new businesses. Their ability to navigate price increases and consumer behavior will provide valuable insights for emerging companies aiming to understand market dynamics and position themselves competitively. Overall, the upcoming Federal Reserve meeting and earnings season introduce potential hurdles for new businesses. To thrive in this volatile market climate, entrepreneurs must closely monitor these events, stay adaptable, and make informed decisions based on the latest developments to successfully navigate through the challenges ahead. Article First Published at: https://www.cnbc.com/2023/07/21/wall-street-rides-into-next-week-as-traders-brace-for-a-big-fed-decision.html