By Peter Bergman (MoneyAmped.com)
U.S. stock futures are on the rise as we kick off a week filled with crucial central bank meetings, including the Federal Reserve, along with earnings reports from major tech companies. Apple is gradually integrating artificial intelligence capabilities into its flagship products while the European corporate earnings season is ongoing.
The Federal Reserve takes the lead in the central bank parade this week
This week, all eyes will be on central banks as they prepare to hold policy meetings. The Federal Reserve, the Bank of England, and the Bank of Japan will be in the spotlight as investors eagerly await their decisions.
The Federal Reserve will wrap up its July policy meeting on Wednesday, and it is widely anticipated that it will keep its benchmark overnight interest rate within the existing range of 5.25% to 5.50%, a level that has remained unchanged since last July.
Nevertheless, the markets are widely anticipating a rate cut in September, particularly in light of the recent data from the personal consumption expenditures price index. The Fed closely monitors this index to gauge inflation, and it indicates a slowdown in price growth.
Hence, Fed Chair Jerome Powell’s declaration will be thoroughly examined to determine whether he lays the groundwork for a potential decrease in interest rates during the upcoming meeting.
The Bank of Japan will wrap up its most recent policy-setting meeting on Wednesday, and there is growing speculation regarding the possibility of a rate increase despite the delicate state of the economy and subdued consumer confidence.
The Bank of England convenes on Thursday despite significant uncertainty regarding whether policymakers will implement their initial interest rate reduction in 2020.
Last month, the Monetary Policy Committee of the BoE voted 7-2 to maintain interest rates at their current level. However, in the future, this decision is anticipated to become more nuanced as policymakers grapple with the dilemma of balancing elevated service price inflation against sluggish economic growth.
Market futures show an upward trend in anticipation of the upcoming Federal Reserve meeting and earnings reports
U.S. stock futures inched up on Monday, marking the beginning of a week that a Federal Reserve meeting and several important corporate earnings reports will heavily influence.
At 04:05 ET (08:05 GMT), the Dow futures contract saw a 60-point increase, equivalent to a 0.2% rise. Similarly, S&P 500 futures experienced a climb of 12 points, or 0.2%, while Nasdaq 100 futures rose by 70 points, indicating a 0.4% increase.
Last week, the major indices declined, with the Nasdaq Composite significantly impacted by the slowdown in the technology sector.
In the upcoming days, earnings reports from major players in the tech industry will be released. Microsoft (NASDAQ:MSFT) is set to report earnings on Tuesday, followed by Meta (NASDAQ:META), the parent company of Facebook, on Wednesday. Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) will also be sharing their earnings on Thursday.
Underwhelming figures may rekindle concerns that led to a harsh sell-off in the previous week, as the Nasdaq experienced its most challenging day since late 2022 on Wednesday.
Apple’s plans for artificial intelligence require patience and time
According to a report by Bloomberg, Apple (NASDAQ:AAPL) is experiencing delays in incorporating its newly revealed artificial intelligence features, called Apple Intelligence, into its popular iPhone and iPad devices. Unfortunately, these features will not be included in the upcoming software update as initially anticipated.
According to a Bloomberg report, Apple’s AI plans won’t be ready for the initial September releases of iOS 18 and iPadOS 18. However, they are expected to be included in the updates scheduled for October.
In June, the company introduced a range of innovative AI-driven capabilities for its primary devices, aiming to capitalize on the ever-growing interest in AI and counterbalance the declining sales of its flagship iPhone.
Apple is poised to announce its financial results for the June quarter in the coming days. Due to heightened competition and market saturation in the smartphone industry, the company is anticipated to experience a continued decrease in device sales.
Heineken records the worth of Chinese investment
There will also be profits in Europe to process as the second-quarter results season continues.
Shares of Heineken (AS:HEIN) tumbled by 7% following disappointing half-year results and a significant impairment announcement. The company wrote down the value of its 40% stake in China Resources Beer, leading to the decline in share value.
That said, Heineken has also revised its full-year profit forecast, anticipating a 4% to 8% increase in organic operating profit in 2024. This is a significant improvement from its previous projection of single-digit growth.
Shares of Philips (AS:PHG) surged by 10% following the release of the company’s second-quarter results, which exceeded expectations. The strong performance was driven by increased earnings, successful implementation of the restructuring program, and insurance income related to Respironic’s product liability claims.
Pearson (LON:PSON) shares experienced a 3.5% decline following the release of their financial report, which showed a decrease in pretax profit compared to the previous year. However, the company reassured investors that they are still on course to meet their full-year projections.
Crude oil prices rise due to increased tensions in the Middle East
Oil prices surged on Monday due to growing apprehension over an escalating conflict in the Middle East. This incident, which involved a fatal rocket attack in the Israeli-occupied Golan Heights, has raised concerns about its potential impact on the global oil supply.
At 04:05 ET, the U.S. crude futures (WTI) increased slightly by 0.1% and reached $77.20 per barrel, while the Brent contract also rose by 0.1% and reached $80.38 per barrel.
According to reports, the strike over the weekend resulted in the unfortunate loss of at least 12 lives. Israel and the U.S. have attributed the attack to Iran-backed Hezbollah, although the group has denied any involvement.
Israel has pledged to respond to Hezbollah in Lebanon, and Israeli aircraft struck targets in southern Lebanon on Sunday.
The escalating tensions are also dampening the possibility of a truce between Israel and Hamas, as the optimism for a ceasefire in Gaza has been growing.
However, there are restrictions on the extent of the gains due to the pessimistic forecast for oil consumption.
