The most significant economic report, the most important economic council, and the most influential publicly traded company are all on investors’ calendars in the week ahead.
First, on Tuesday, Apple is scheduled to release its latest quarterly financial results. As the most valuable publicly traded company in the U.S., Apple plays an enormous role in the portfolios of investors. Apple represents the largest single slice of the S&P 500 Stock Index (almost 4 percent). Almost 3,000 institutional investors own shares. These include mutual funds and pension funds where Americans have socked away money for their retirement.
Expectations are high for Apple’s sales and profits, as they usually are. While the results may drive initial price action in the stock, any hint about new products, especially new iPhone models expected in September, will drive investor perception of future profits.
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Then, on Wednesday, after meeting for two days, the Federal Reserve’s interest rate setting committee will announce any action on rates. None is expected, but the market expects the central bank to continue hiking rates at its next meeting in late September. The economy is growing at its fastest rate in four years, giving the Fed justification to stick with its pledge to gradually hike rates later this year. However, growing trade tensions, a pick-up in inflation, and presidential pressure increasing on the Fed to stop raising rates tightens the usual balancing act the Fed has to strike so as not to surprise investors.
Finally, on Friday, the July jobs report will be scrutinized for signs discouraged American workers are rejoining the workforce. The proportion of people considered in the job market has been floundering near a generational low. While the economy has been creating almost 200,000 jobs per month over the past year, millions of potential workers aren’t in the labor force. Tens of thousands returned to the job market in June. If that continued in July, it will be an encouraging sign.
After a volatile few months the S&P 500 has rallied more than 8 percent since April, returning to record territory. This trio of power players will help determine if that trend continues.
Tom Hudson hosts “The Sunshine Economy” on WLRN-FM; @HudsonsView.