Market Outlook: 5 Critical Factors to Watch Next Week

U.S. Data and Federal Reserve Speakers

• Economic Data: The economic calendar is light following a weak July jobs report. Key upcoming data includes the Institute of Supply Management’s service sector index on Monday, which is anticipated to show modest growth, and the weekly initial jobless claims report on Thursday, which is expected to show a slight decrease from near one-year highs.
• Federal Reserve: San Francisco Fed President Mary Daly and Richmond Fed President Thomas Barkin are scheduled to speak. Last week, the Fed kept interest rates steady but hinted at potential rate cuts in September​ (Avalon)​​ (Savvy)​.

High-Profile Earnings Reports

• Caterpillar (NYSE): Provides insight into the manufacturing sector.
• Walt Disney (NYSE): Offers a glimpse into the consumer and entertainment sectors.
• Eli Lilly (NYSE) and Super Micro Computer (NASDAQ): Represent the healthcare sector and the AI-driven tech market, respectively​ (Nasdaq)​​ (Savvy)​.
• Market Reaction: The Nasdaq Composite fell into correction territory due to fears of an economic slowdown and disappointing forecasts from Amazon and Intel.

China Economic Outlook

• Economic Data: A series of reports are expected, including services activity, trade data, and consumer prices.
• Recent Trends: Indications suggest a challenging outlook for China’s economy, with recent data showing a need for further stimulus efforts from Beijing​ (Savvy)​.

Reserve Bank of Australia (RBA) Decision

• Interest Rates: The RBA is expected to hold rates steady after recent data showed core inflation at a two-year low and moderated economic growth. Market participants are keen on the central bank’s forward guidance, with a 70% probability of a rate cut by year-end if inflation continues to slow​ (Savvy)​.

Oil Prices

• Recent Trends: Oil prices fell to their lowest levels since January due to weak economic data from the U.S. and China, raising concerns about global demand.
• Geopolitical Risks: The conflict between Lebanon’s Hezbollah and Israel, and OPEC+’s decision to maintain current production policies, add to the volatility in oil prices​ (Savvy)​.

Summary

Investors are navigating a complex landscape marked by economic uncertainty, high-profile earnings reports, and geopolitical risks. The focus will be on key economic data, central bank actions, and corporate earnings to gauge market direction in the coming week.