U.S. equity futures remained nearly unchanged on Monday as investors prepare for pending inflation data following Friday’s relief rally. Callie Cox, chief market strategist at Ritholtz Wealth Management, noted that high emotions and clustered market swings could lead to another turbulent week. Investors are particularly focused on the upcoming July producer price index report, with the consumer price index set to follow on Wednesday, both of which are expected to significantly influence market sentiment and trading strategies.

European stocks began the new trading week on a positive note, initially rising before paring some of their earlier gains. Investors are closely watching for indications that the market turbulence from the previous week has subsided. The financial services and insurance sectors were among the top performers, each advancing by approximately 0.6%. This week, market participants are particularly focused on upcoming inflation data from the U.S. and U.K., which are expected to play a significant role in shaping market sentiment and investment decisions.

Asia-Pacific markets experienced a positive start to the week, with most indices showing gains on Monday. This comes after a tumultuous week marked by significant selloffs and a subsequent sharp recovery, particularly in Japanese stocks. Investors are now turning their attention to upcoming economic indicators from India, specifically inflation and industrial output data, which are expected to be released later in the day. These figures will likely influence market sentiment and trading strategies moving forward.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include BLDP, ESPR, FTRE, BEKE, & MNDY.  After the bell include ALC, DHT, KGS, PACS, & RUM.

News & Technicals’

Veteran investor David Roche anticipates a bear market in 2025, driven by factors such as smaller-than-expected rate cuts, a decelerating U.S. economy, and an AI bubble. He predicts these elements could lead to a market decline of around 20%, potentially beginning at the end of this year. However, Roche also notes that the Federal Reserve will have the flexibility to adjust in response to these economic challenges.

The Pentagon has deployed a guided missile submarine, and a carrier strike group equipped with F-35C fighter jets to the Middle East, citing the need to bolster U.S. military presence and capabilities in response to rising regional tensions. This move follows a statement from Iran’s leadership vowing retaliation against Israel after the assassination of Hamas’ former political chief, Ismail Haniyeh, in Tehran on July 31. The Pentagon’s actions underscore the escalating conflict and the U.S.’s commitment to maintaining stability in the region.

The Biden Administration has launched a comprehensive, multi-agency regulatory initiative aimed at curbing corporate practices that are perceived to waste consumers’ time and impose unnecessary bureaucratic hurdles. White House domestic policy advisor Neera Tanden highlighted that these practices often involve companies delaying services or making it excessively difficult for consumers to cancel services, thereby retaining customers’ money for extended periods. Central to this new effort are a series of rulemakings by the Consumer Financial Protection Bureau, which aim to address and mitigate issues related to customer service “doom loops” and the use of chatbots.

U.S. short seller Hindenburg released a report on Saturday alleging that Madhabi Puri Buch, the chair of the Securities and Exchange Board of India, had previously invested in offshore funds also utilized by the Adani Group. In response, Buch dismissed the claims as baseless. According to the report, Adani Group companies experienced a significant market impact, losing approximately $2.4 billion in value on Monday.

There is a good chance of a choppy hurry up and day with the markets highly anticipating the Tuesday PPI and Wednesday CPI reports. Earnings numbers will decline sharply by mid-week removing a major source of inspiration and price volatility. However, the economic data this week could keep the wild whipsaws going as the market reacts to the results.

Trade Wisely,

Doug