• After a slow start to the week things will start to heat up in the financial markets
  • What are some of the events to look out for in the stock market?
  • Which Australian stocks are starting the week on the right foot?

A trickle becomes a flood

The week gets off to a slow start on Monday and Tuesday, with only a trickle of pertinent economic data being published.

On Wednesday, the news cycle starts to accelerate with the US Federal Reserve’s key interest rate decision. The market consensus is for a sizeable 0.75% increase in the base lending rate, about as close to a monetary policy emergency brake as one could imagine.

Thursday and the Australian June retail sales month over month are released. Shortly after, the heavy-hitting US GDP economic data for calendar Q2 2022 is followed swiftly by the US jobless claims.

We round out the week with the European GDP up to the end of June, US personal expenditure, US consumer sentiment and the closely watched Chinese Purchasing Management Indices (PMI).

Arguably the biggest mover for US and international stocks will come from the large swathe of Q2 2022 company earnings to be released this week. Microsoft Corp. NASDAQ:MSFT (MSFT), Apple Inc. NASDAQ:AAPL (AAPL), and Alphabet Inc. NASDAQ:GOOG (GOOG) publish quarterly results.

The cloud software and application offerings of GOOG and MSFT to small and large businesses and the consumables section of AAPL provide a key bellwether to the health of both the US and the wider international economy.

Monday movers

Coal continues its unassailable run into the 400 handle, and coal for loading from Newcastle port is higher by another 1.4% in morning trade to $409.2 AUD per tonne.

The European search for energy resources to replace the Russian supply continues apace; the Australian suppliers remain one of the main beneficiaries.

A change of tack for China?

Chinese leaders were drumming up the benefits of COVID-19 vaccines over the weekend, indicating that a necessary economic full reopening is just around the corner. The effect will likely send the demand for raw materials higher in anticipation of accelerated production.

The news created a bounce in steel prices; Rebar futures traded in China are higher by 0.42% to start the week. This had the knock-on effect of raising the share price of Australian metallurgical coal and iron ore producers.

BHP Billiton ASX:BHP (BHP) is up over 1.5% in morning trade to $37.35 AUD per share, and Fortescue Metals Group ASX:FMG (FMG) is higher by 2.36% to $18.25 AUD per share.

Summary

The financial markets are trading in a narrow range early in the week.

Highly sensitive international economic data is to be released at an accelerating pace throughout the week.

US company earnings can potentially sway stock market sentiment one way or the other.

The Australian stock market can be expected to be buffeted by winds from afar in the week ahead.