© Reuters.
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Par Geoffrey Smith
Investing.com – Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen begin two days of testimony in Congress, in the wake of yet another inflation shock in the United States. The producer price data for June may or may not corroborate the picture given by the consumer price report on Tuesday. The Reserve Bank of New Zealand has said it will end its bond buying program ahead of schedule, adding to the list of central banks around the world removing emergency measures. Apple (NASDAQ 🙂 is predicting a sharp increase in iPhone production this year. Citigroup , Bank of America (NYSE:) et Wells Fargo (NYSE 🙂 publish their results, as does Delta Air Lines (NYSE :). Here is what you need to know about the financial markets this Wednesday, July 14.
1. Is inflation still “transient” after a new jump?
Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen head to Capitol Hill for their semi-annual report to Congress, a day after another stronger-than-expected inflation report revived expectations according to which the Fed will have to withdraw its monetary stimulus sooner than expected.
A reduction in bond purchases could be frowned upon by the Treasury market, which will have to contend with years of increased supply if Democrats push the $ 3.5 trillion poverty plan they want to tackle. adopted on Monday.
Mr Powell’s testimony, which begins at 12 p.m. ET (1600 GMT), will show whether Mr Powell – who has repeatedly downplayed the current spike in inflation as “transient” – has changed his mind in the light of a report which showed that prices are increasing significantly in the economy. U.S. producer price data at 8:30 a.m. ET will serve as a warm-up before the main event.
2. New Zealand begins to tighten interest rates, BoC meeting expected, UK CPI increases
Meanwhile, more and more central banks around the world are ending the emergency measures they put in place during the pandemic. The Reserve Bank of New Zealand has said it will stop buying bonds later this month, well ahead of schedule, and also ditched the idea that it needed time to meet its inflation target. . The increased by more than 1% in reaction.
The Bank of Canada, which has already started cutting asset purchases, will announce its at 10 a.m. ET, while Turkey’s central bank is expected to keep its rate unchanged, after raising it from 8.25% to 19% in the past. over the past seven months.
Elsewhere, the strengthened after UK inflation figures for June also surprised on the upside.
3. US stocks should open mixed as number of Covid-19 cases affects stock markets
US stocks should open mixed, but higher, after a night marked by the June inflation report.
As of 5:30 am ET, is flat, while is up 0.1% and is up 0.4%, with Apple (see below) posting a strong performance.
News of a 47% increase in Covid-19 cases in the United States on Tuesday, the biggest weekly jump since April 2020, has led cyclics and bets on reopening the economy to underperform again . will be the first of the major airlines to publish its quarterly results before the opening.
Attention to banking results may be more intense than usual, after the first reports of the season from JPMorgan (NYSE: and Goldman Sachs (NYSE 🙂 both disappointed on Tuesday. {{Erl-243 || Bank of America}, Citigroup (NYSE :), and PNC Financial (NYSE 🙂 all need to update before trading begins.
4. Apple is about to take advantage of Huawei’s misery
According to a Bloomberg report citing anonymous sources, Apple has asked its suppliers to manufacture up to 90 million iPhones this year, a big increase from the first year of the pandemic.
The news suggests that the iPhone maker expects demand for upgrades to increase dramatically as the rollout of 5G services in the United States and elsewhere accelerates.
The report says Apple is also exploiting the problems of Huawei, whose mobile phone business has been hampered by US restrictions on the supply of essential components.
The report pushed Apple stock up 1.4% in pre-market trading, to a new all-time high. The actions of suppliers such as Taiwan Semiconductor Manufacturing (NYSE 🙂 and Hon Hai Precision Industry (OTC 🙂 – also known as Foxconn (TW 🙂 – also increased during the Asian session.
5. Oil Drift Down After US Inventory Drawdown Slows
Crude oil prices fell overnight, losing some of the momentum gained by an American Petroleum Institute inventory update that showed another 4.1 million barrels drawdown on crude inventories. Americans last week.
This is the tenth drawdown in the past eleven weeks, although it was slightly lower than expected and also the lowest in five weeks. US government inventory data {{ecl-75 |||} is expected as usual at 10:30 am ET.
At around 5:30 a.m. ET, futures were down 0.6% to $ 74.82 per barrel, while futures were down 0.5% to $ 76.10 per barrel.
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