We'll get 'surprisingly strong' bank results, setting the stage for a strong season, says Ed Yardeni
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CNBC
9 hours ago
- CNBC
Here are the 4 big things we're watching in a busy week ahead for the stock market
Buckle up. It's a jam-packed week ahead, with a host of influential companies set to report alongside a Federal Reserve meeting — and, if that wasn't enough, there's fresh inflation and jobs data, too. On top of all that, we'll keep a close eye on any trade deal headlines ahead of the Aug. 1 deadline set by the Trump administration. In particular, we'll be watching for any agreement with the European Union. U.S. and Chinese officials are also set to meet in Sweden for another round of trade talks. Last week, the U.S. trade deal with Japan helped push the S & P 500 to record highs. Now, here's a closer look at what to expect in the week ahead from the Fed, the week's economic data releases and Club earnings. 1. Fed: Despite President Donald Trump 's pressure campaign, the central bank on Wednesday afternoon is widely expected to keep its benchmark overnight lending rate steady in the range of 4.25% to 4.5%, according to the CME Group's FedWatch tool . Instead, the question on investors' minds is whether a cut at the Fed's September meeting is on the table, so they'll be listening for whether Chairman Jerome Powell lays the groundwork for that during his typical post-meeting press conference. We don't expect Powell to change his tune about the Fed's data-dependency in making policy decisions, even in the face of Trump's criticism. On that note, we want to hear how Powell characterizes the resiliency seen in the labor market — initial jobless claims have dropped for six straight weeks, for example — and the inflation trends. While Trump's tariffs haven't yet led to a dramatic upturn in inflation, recent reports are showing a slight uptick , and there's a belief that U.S. companies absorbing the tariffs can only do so for so long before needing to raise prices. As of Saturday, the market put 62% odds on a quarter-point cut in September. Before the Fed's decision Wednesday, we'll get the first reading of second-quarter gross domestic product, which could be discussed during Powell's press conference. 2. Inflation: After the Fed's meeting concludes, tariff effects will stay in the spotlight thanks to the release of the June personal consumption expenditures price (PCE) index on Thursday morning. This is the Fed's preferred measure of inflation, despite the consumer price index (CPI) garnering more attention. There are some differences in the way the two gauges are calculated — particularly on housing and health-care inputs — but what stays the same is that investors are looking for tariff-related signs of inflation. For example, in the June CPI report tariff-sensitive categories like furniture and apparel showed outsized increases. For the PCE, economists polled by Dow Jones expect a 0.3% month-over-month increase and an annual rate of 2.5%. On a core basis, which excludes volatile food and energy prices, the Dow Jones consensus is for a 0.3% monthly gain and 2.7% annual increase. 3. Jobs, jobs, jobs: The big labor market event of the week is Friday's nonfarm payrolls report for the month of July, offering Wall Street a look at the pace of hiring in the face of trade policy uncertainty. As mentioned earlier, the U.S. labor market has continued to defy expectations for a material slowdown. For July, the consensus is that the U.S. economy added 102,000 jobs and the unemployment rate edged up to 4.2% from 4.1% in June, according to Dow Jones. Revisions to the prior months reports are something to watch. Ahead of Friday's release, we'll get the Job Openings and Labor Turnover Survey on Tuesday. The so-called JOLTS measures the amount of slack in the labor market, carrying implications for wage inflation. On Wednesday, payroll processing firm ADP releases its monthly look at private hiring — but, as we once again saw with the June data, it's not predictive of what the official government report will say. Thursday morning will bring the latest batch of first-time filings for unemployment insurance, known as initial jobless claims. Will it be seven weeks in a row of declines? One area of weakness in recent jobs data has been continuing claims, which suggests that while layoffs are going in the right direction, it's taking people time to get rehired. 4. Earnings: There are seven Club names reporting in the week ahead. All revenue and sales estimates provided below are courtesy of LSEG. Starbucks kicks off the action Tuesday night, and investors will be searching for additional signs of progress in CEO Brian Niccol's revitalization efforts. In its mostly disappointing April earnings report, Niccol had good things to say about the roughly 700 stores where it was piloting staffing and deployment changes. We hope that continued, with the benefits spreading to more cafes across the country. The FactSet consensus is for Starbucks to report its sixth straight quarter of same-store sales declines, at minus 1.3%. While necessary to turn the business around, Niccol's investments aren't cheap, so we don't expect strong profitability metrics this quarter, either. We do, however, hope that management is mindful that telling investors that earnings per share isn't a great metric to judge the turnaround may not go over well. Analysts expect total revenue of $9.31 billion and earnings per share of 65 cents. Meta Platforms reports after the close Wednesday. An expensive question on investors' minds: How much has Meta's spending spree on artificial intelligence talent cost so far? In April, the Instagram parent lowered its total expense guidance to $113 billion to $118 billion, down $1 billion on both ends of the range. Will that need to be revised higher? Similarly, will Meta's capital expenditures guidance of $64 billion to $72 billion be adjusted to account for higher spending on AI chips and data centers? The continued strength of Meta's social media ad business — and how that's driven earnings-per-share growth — has quelled concerns about aggressive AI spending. This time around, the market is looking for Family of Apps revenue to increase 14.8% on annual basis, according to FactSet. Total revenues are expected to be $43.84 alongside EPS of $5.91. Joining Meta on Wednesday night is fellow tech giant Microsoft , which is reporting its fiscal 2025 fourth-quarter results. The most important line item is the growth of the cloud-computing business Azure, and the AI services contributions to that expansion. Last quarter, Azure grew a better-than-expected 35% on a constant-currency basis, with AI being responsible for 16 points of growth. For the June period, the FactSet consensus for Azure is growth of 34.9% (there's no estimate for AI, specifically). Overall, analysts expect Microsoft to report earnings per share of $3.37 on revenue of $73.81 billion. Microsoft's capex commentary for its fiscal 2026 will also be note of note, carrying implications for leading AI chipmaker Nvidia and the likes of industrials such as Eaton, which supplies electrical equipment for data centers. The current consensus is for capex of $73.9 billion in fiscal 2026, according to FactSet. We'll also listen for any updates on the contract renegotiations with frenemy OpenAI, which is seeking greater independence from its early benefactor. Bristol Myers Squibb will report results on Thursday before the open. Sales of Cobenfy, the company's new schizophrenia treatment, will be a key watch item for investors. We're also interested to hear about other potential indications for Cobenfy, such as its use in the treatment of Alzheimer's psychosis, with late-stage trial data expected later this year. The initial response that Bristol Myers is seeing to its recently announced plan to sell blood-thinning medication Eliquis directly to patients through its Eliquis 360 support program will also be something to watch out for during the conference call. Analysts may also ask about Cristian Massacesi joining as its new chief medical officer. The Street is looking for earnings of $1.07 per share on revenue of $11.38 billion. Apple joins the parade of tech earnings after the bell Thursday. After the March quarter saw a "pull-forward" in iPhone sales as consumers rushed to beat fears of tariff-driven price hikes, there's a belief that the final two quarters of Apple's September-ended fiscal year will be softer than before. For the three months ended in June, the FactSet consensus is for iPhone sales of $40 billion. A few more questions: Will Apple's high-margin Services business get back on track after a light miss in the March quarter? Did the estimated $900 million tariff impact for the June quarter materialize, and can management shed any more light on its supply chain and artificial intelligence strategies going forward? There's no question Apple has been a frustrating stock this year, but as long as the iPhone remains the best consumer hardware device on the market, there's time to turn it around. Analysts expect total revenue of $89.33 billion and earnings per share of $1.43. Amazon will also report after the bell on Thursday. Revenue growth and profitability at cloud unit Amazon Web Services remains the key metric for investors to watch. On the retail side, we're also interested in more details on how Amazon is leveraging AI and automation in its warehouses and throughout its massive logistics network. Though the four-day Prime Day event won't be reflected in the reported numbers — given it was in July (third quarter) — we're still interested to hear management's commentary on the event, as it will no doubt play into the guidance the team provides. The combination of Prime Day and the back-to-school season stands to support both consumer demand and ad revenue growth in the third quarter. Analysts expect total revenue of $162.06 billion and earnings per share of $1.32. Linde will be out with results on Friday, before the opening bell. We're simply looking for more of the consistency we've come to know and love from Linde. However, outside of the numbers, it will be interesting to see what management has to say about the various industries the company serves. A commentary on how tariffs are affecting demand from customers will also help better inform our view on various sectors of the economy. Also of interest will be management's view on the recently announced long-term agreements to supply the U.S. space industry. As for earnings, last time around, management baked in the assumption of economic deterioration and recessionary conditions. Given the resiliency we've seen since then and the increased clarity as it relates to tariffs, we'll look for the team to revise their outlook for the remained of the year. Analysts are looking for earnings of $4.03 on revenue of $8.35 billion. Week ahead Monday, July 28 Before the bell earnings: New Gold (NGD), Enterprise Products Partners (EPD), Alerus Financial Corporation (ALRS), Bank of Hawaii (BOH), Alliance Resource Partners (ARLP) After the bell: Celestica (CLS), Rambus (RMBS), Tilray (TLRY), WM (WM), Cadence Design Systems (CDNS), Crane (CR), Whirlpool (WHR), Amkor Technology (AMKR), Brixmor Property Group (BRX), Enterprise Financial Services (EFSC), Universal Health Services (UHS), Brown & Brown (BRO), Veralto (VLTO) Tuesday, July 29 FHFA Home Price Index at 9 a.m. ET Job Openings and Labor Turnover Survey at 10 a.m. ET Before the bell: UnitedHealth (UNH), SoFi (SOFI), PayPal (PYPL), Boeing (BA), United Parcel Service (UPS), Spotify (SPOT), Merck (MRK), Nucor (NUE), AstraZeneca (AZN), JetBlue Airways (JBLU), Procter & Gamble (PG), Carrier Global (CARR), American Tower (AMT), Norfolk Southern (NSC), Polaris (PII), Royal Caribbean Cruises (RCL), Stellantis (STLA) After the bell: Starbucks Corp. (SBUX), Visa (V), Marathon Digital (MARA), Booking (BKNG), Cheesecake Factory (CAKE), Seagate (STX), Teradyne (TER), Penumbra (PEN), PPG Industries (PPG), Republic Services (RSG), Avis Budget (CAR), Caesars Entertainment (CZR) Wednesday, July 30 ADP Employment Survey at 8:15 a.m. ET First look at Q2 U.S. GDP at 8:30 a.m. ET Federal Reserve interest rate decision at 2 p.m. ET Fed Chair Jerome Powell's press conference at 2:30 p.m. ET Before the bell: Altria (MO), Vertiv (VRT), Virtu Financial (VIRT), Kraft Heinz (KHC), Teva Pharmaceutical Industries (TEVA), Generac (GNRC), Etsy (ETSY), GE HealthCare (GEHC), Hershey Company (HSY), Humana (HUM), Harley-Davidson (HOG), VF Corp. (VFC), Vita Coco Company (COCO), GlaxoSmithKline (GSK) After the bell: Meta Platforms. (META), Microsoft (MSFT), Robinhood Markets (HOOD), Applied Digital (APLD), Carvana (CVNA), Lam Research (LRCX), Qualcomm (QCOM), Ford Motor (F), Arm Holdings (ARM), Albemarle (ALB), MGM Resorts International (MGM), Agnico-Eagle Mines (AEM), Sprouts Farmers Market (SFM), Allstate (ALL), Brookfield (BN), Western Digital (WDC), eBay (EBAY) Thursday, July 31 Personal Consumption Expenditures Price Index at 8:30 a.m. ET Initial jobless claims at 8:30 a.m. ET Before the bell: CVS Health (CVS), Roblox (RBLX), Cameco (CCJ), Carpenter Technology (CRS), Norwegian Cruise Line (NCLH), AbbVie (ABBV), Bristol Myers Squibb (BMY) , Howmet Aerospace (HWM), Baxter International (BAX), Builders FirstSource (BLDR), Cigna (CI), Canada Goose (GOOS), Mastercard (MA), PG & E (PCG), Shake Shack (SHAK), SiriusXM (SIRI), Southern Company (SO) After the bell: Apple (AAPL), Amazon (AMZN), MicroStrategy (MSTR), Reddit (RDDT), Coinbase Global (COIN), Riot Platforms (RIOT), Enovix Corporation (ENVX), Roku (ROKU), Bloom Energy (BE), Cloudflare (NET), Cable ONE (CABO), Innodata (INOD), MasTec (MTZ), AXT (AXTI), Beazer Homes USA (BZH), Eldorado Gold (EGO), Edison International (EIX) Friday, August 1 Trump's "reciprocal" tariffs deadline Nonfarm payrolls report at 8:30 a.m. ET Before the bell: Linde (LIN), Exxon Mobil (XOM), Chevron (CVX), Regeneron Pharmaceuticals (REGN), Colgate-Palmolive (CL), CNH Global (CNH), Dominion Energy (D), AES (AES), Cboe Global Markets (CBOE), Fulgent Genetics (FLGT), Fluor (FLR), LyondellBasell Industries (LYB), Ocugen (OCGN), T. Rowe Price (TROW), Ameren (AEE), Ares Management (ARES), Avantor (AVTR) (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
The Hill
16 hours ago
- The Hill
5 ways Trump has shaped the economy in 6 months
President Trump sailed into the White House last year on confidence in his ability to handle the economy following 40-year high inflation and deep-seated financial frustration among voters. Here are the big economic hallmarks of the first six months of his second term, spanning taxes, tariffs, deficits, markets, and the dollar — and how they could affect regular Americans. Trade war 2.0 Trump has massively scaled up the reset of U.S. trade policy that he started during his first term and that was left largely in place during the Biden administration. While his country-specific tariffs have been pushed back to Aug. 1 and multiple sketches of bilateral trade deals have been announced, the overall U.S. tariff level is around its highest levels in a century, mostly due to tariffs on China. The tariff rate on China is now about 50 percent, according to different estimates, This is sparking concerns about a broader ' decoupling ' of the world's two largest economies. The Yale Budget Lab put the overall U.S. tariff level at 20.2 percent this week and Fitch Ratings put it at 14.1 percent last month. Total tariff rates have a large statistical range as they can be assembled and weighted in different ways. Trump and the White House have announced trade deals with China, Japan, Vietnam, Indonesia and the United Kingdom — but many specifics are still forthcoming. Tariffs have likely started to show up in consumer prices. The consumer price index (CPI) ticked up to a 2.7-percent annual increase in June from 2.4 percent in May, and tariffs are expected to drive it higher. Many economists — including those at the Federal Reserve — have cast the tariffs in stagflationary terms, meaning that they'll push prices higher while detracting from growth. Gross domestic product (GDP) contracted in the first quarter as importers pulled orders in ahead of tariffs. The Atlanta Fed is forecasting 2.4-percent annualized growth for the second quarter, which would be solid. Trump has pursued his trade war with the stated goal of bringing back outsourced jobs and boost household income, but there are few signs of this happening so far. Wage growth has fallen under Trump from a 4.2-percent annual increase in February to 3.9 percent in June. U.S. wage growth has stagnated over the long term. Accounting for inflation, purchasing power of U.S. paychecks grew by just over $2 between 1964 and 2018, according to Pew Research. The number of U.S. manufacturing jobs, which Trump has touted as getting a boost from tariffs, have been largely stagnant since February at 12.8 million. Tax cuts 2.0 Earlier this month, Trump signed $4.5 trillion worth of tax cuts into law, most of which were an extension of the cuts he signed in 2017. The passage of the president's tax-cut bill was a major win for Trump and the Republican Party, making it through Congress much faster than analysts had expected. Experts told The Hill they didn't think it would happen until the very end of this year, especially because the House and Senate were pursuing differing reconciliation strategies to get it done. However, the tax cuts were expensive and are expected to add substantially to the national debt. Excluding interest, the law will cost $3.4 trillion through the next nine years. That will be added to the total U.S. debt stock of about $36 trillion. Fights over the debt, which regularly require the acceptable limit to be raised by Congress, have resulted in a downgrade of U.S. credit worthiness by all the big credit agencies. Trump's tax law included a $4.1 trillion increase in the ceiling so the issue won't be a political one for the time being. Debt costs could be paid for by future reductions to social programs. The tax law will kick 10 million Americans off of public health insurance in 2024. While tax cuts are traditionally thought of as economically stimulative, the congressional tax scorer projected minimal growth resulting from the Senate's version of the bill at just 1.8 percent. The Congressional Research Service (CRS) found in 2019 that real wages increased following the 2017 tax law by 1.2 percent, an amount that smaller than the overall growth in compensation in those years. 'Ordinary workers had very little growth in wage rates' resulting from the cuts, CRS found. Asked what the main point of the tax law is, University of Michigan tax law professor Reuven Avi-Yonah pointed to its overall redistributive effects, which Congressional Budget Office analyses show to take resources from the poor to give to the rich. 'From a policy perspective, the main point is reverse Robin Hood,' he said in an interview. 'That's fundamentally there.' The decline of the dollar The U.S. dollar has declined precipitously in value relative to other currencies since Trump has taken office, a move that has flouted conventional economic thinking. Since inauguration day, the DXY dollar index has dropped 11 percent to 97.3 from 109.4 even as tariffs are now at near century-high levels. This has flummoxed analysts, who are venturing guesses about what's going on. While the dollar decline decreases the purchasing power of the dollar abroad, it could also bolster U.S. industrial production and the export sector in line with longer-term U.S. economic objectives. 'I'm a person that likes a strong dollar, but a weak dollar makes you a hell of a lot more money,' Trump said Friday. 'When we have a strong dollar, one thing happens: It sounds good. But you don't do any tourism, you can't sell tractors, you can't sell trucks, you can't sell anything,' he said. Top White House economists have also talked up the benefits of a weaker dollar. 'The reserve function of the dollar has caused persistent currency distortions,' Council of Economic Advisers chair Stephen Miran said earlier this year. Miran has argued in the past that 'persistent dollar overvaluation … prevents the balancing of international trade, and this overvaluation is driven by inelastic demand for reserve assets.' In other words, scaring investors away from the dollar may work to the U.S.'s advantage. Some analysts have compared the decline to the Plaza Accord, a 1985 currency agreement that devalued the dollar and reduced the trade deficit. The financial world is starting to see results. 'With the dollar now firmly back within our estimated fair-value range, we view the risks as more balanced than at any time during the last three years,' analysts for Vanguard said Thursday. Attacks on the Fed Trump's first six months have also been marked by vociferous and repeated attacks from the president on the Federal Reserve and Chair Jerome Powell. Trump reportedly went so far as to pitch the idea of firing Powell to GOP lawmakers last week before saying that it was 'highly unlikely.' While the Fed seems content to maintain its pause on cuts for now, Trump's aggressions have shown up in financial markets. More substantially, they've also changed the conversation on monetary policy. Economists have started to worry about a Fed that takes its cues from the White House, making it less independent and more susceptible to short-term political pressures. They're worried that the Fed could become more tolerant of inflation, which could lead to financial repression — when the inflation rate surpasses the rate of interest, leading to negative long-term returns on capital. Some supporters of the president have even questioned the 1951 accord between the Fed and the Treasury, whereby the Fed handles the money supply and the Treasury issues bonds. Former Fed Governor Kevin Warsh, who is often listed as a successor to Powell, floated 'a new accord' to replace the 1951 agreement. Warsh said the traditionally independent Fed and the Treasury Department could work together to communicate moves about the Fed's balance sheet. Markets down, markets up Stock markets took a dive at the outset of Trump's trade war and then rallied as different deals were announced, especially the one with China. The The market narrative spurred by the tariffs has reversed, and the S&P 500 index is now at all-time highs. Ownership of the stock market is heavily skewed toward the wealthiest Americans. The poorest half of Americans own just one percent of the stock. Despite the sizzling rebound in stocks, the bond market is still jittery, following a yield spike in April that prompted a course-correction on tariffs from the White House. Consumer sentiment as measured by the University of Michigan has rebounded from lows hit during the height of the tariff rollout, but is still quite a bit lower than it was before the pandemic. Business sentiment is still flagging in various polls, and the latest anecdotal survey of the economy by the Fed is filled with complaints about policy uncertainty. Markets are also processing multiple new pieces of legislation on cryptocurrency, which have classified digital currencies as forms of payment rather than assets.
Newsweek
2 days ago
- Newsweek
Social Security COLA for 2026 and Beyond: What Seniors Want
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. American seniors are frustrated with how Social Security adjusts for inflation, and they want change. A new report from The Senior Citizens League (TSCL) shows a clear demand among retirees to improve the way the annual cost-of-living adjustment (COLA) is calculated. According to the group's latest survey of 1,92 individuals over the age of 62, 34 percent of respondents identified updating the COLA formula as their top policy priority for enhancing Social Security benefits. And when presented with specific policy options to raise future COLAs, seniors overwhelmingly supported a shift to a more targeted inflation measure. Currently, the Social Security Administration (SSA) calculates COLA based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index tracks inflation using the spending habits of younger, urban workers, not retirees. Since 1975, COLAs have been applied annually based on CPI-W data gathered during the third quarter of the year (July through September), with the goal of ensuring benefits rise in line with everyday costs, such as housing, food, and medical care. This year, benefits rose by 2.5 percent. The TSCL, based on current CPI-W readings, expects the 2026 COLA to increase slightly to 2.6 percent. However, regardless of the boost, for many retirees, that formula no longer works. According to the TSCL survey, 68 percent of seniors support replacing the current CPI-W model with the CPI-E, or Consumer Price Index for the Elderly. Developed by the U.S. Bureau of Labor Statistics, the CPI-E is an index that tracks the spending habits of Americans aged 62 and older, focusing on the types of goods and services seniors typically use, such as health care, housing, and prescription drugs. "CPI-E is designed to better reflect the spending habits of people aged 62 and older," Colin Ruggiero, co-founder at told Newsweek. "It gives more weight to health care and housing costs which are two of the fastest-growing expenses for seniors. Switching to CPI-E would make COLAs more relevant and responsive to the real financial pressures seniors face." Chris Motola, a financial analyst at told Newsweek: "The main advantage of CPI-E would be to more heavily weight health care and housing costs in COLA calculations, both of which tend to disproportionately eat into seniors' budgets." Another popular idea is making up for what's already been lost. The TSCL survey found that 57 percent of respondents support a one-time "catch-up" COLA payment to compensate for years when benefits failed to keep pace with actual living costs. Composite image created by Newsweek. Composite image created by Newsweek. Photo-illustration by Newsweek/Getty/Canva "A catch-up COLA would be a recognition that past adjustments haven't kept pace with reality," Ruggiero said. "While it's feasible, it would require congressional approval and carry a hefty budgetary cost. Politically, it could gain traction as a way to restore fairness, especially if framed as a correction rather than a new ongoing expense." Still, the limits of these proposals are clear. While COLA reforms could help stabilize seniors' purchasing power, experts caution that they won't fix everything. "Adjusting the COLA is a great start, but it's not the cure-all," said Ruggiero. "We also need broader reforms to strengthen the entire retirement system, including benefit adequacy, solvency, and support for low-income seniors." Motola agreed: "It would go a long way, but again, a major problem is that Social Security isn't really meant to carry the burden alone. We've made it very difficult for people to save money for retirement, and the loss of pensions has placed enormous stress on the system."
