Weekly Review & Preview: Elections, Earnings, Inflation & More

The week of July 8, 2024, is packed with key market events worldwide, continuing the eventful week that preceded it. 

Let’s take a closer look at the week that was and the week ahead:

The Week That Was

Elections Update

The UK elections continued in full swing last week, and French elections this week. Here are the main results:

The UK

On Friday, 5 July, it was announced that the Labour Party, led by Keir Starmer, had won the UK elections after 14 years of Conservatives ruling the UK parliament. 

While the actual implications of these elections are yet to be determined, according to some experts, this could lead to potential interest rate cuts “in the coming months.” If these projections materialise, more opportunities would be presented to “UK housebuilders, which investors have avoided in recent times.” Moreover, energy and investments in UK-listed mining companies could also be affected.

The day after the elections, on Friday, the FTSE 100 (UK 100) and the European STOXX 600 index closed 0.45% and 0.22% lower, respectively, as markets digested the results. On the flip side, the FTSE 350 household goods and home construction index traded 2.5% higher that day.

France 

The French headed for a second round of elections yesterday, Sunday, 7 July, after Marine Le Pen’s far right-wing won the first round of elections the prior Sunday. Despite the first round’s results, the second round of elections marked “a surprise win” for the leftwing alliance. However, France’s political future seems blurry since “no group won an absolute majority.”

For reference, the New Popular Front (a leftwing alliance) won 182 seats, the centrist Together alliance (led by President Emmanuel Macron) won 163 seats, and Le Pen’s far-right National Rally won 143 seats. Still, despite the left’s win in the second round, the party is missing over 100 seats for an absolute victory. 

Interestingly, the current French Prime Minister, Gabriel Attal, announced that he would resign on Monday morning. However, his actual successor is still vague. According to reports, Macron will make the “necessary decisions” after he gets the full results from the 577 constituencies. 

The results saw mixed trading across various French stocks and indices on Monday, 8 July. Whereas many French stocks slipped and the CAC 40 (France 40) index eventually gained 0.2%. 

The Week Ahead

Now that we’ve covered last week’s main events let’s take a look at the week ahead:

Powell Testimony 

Federal Reserve Chair, Jerome Powell, is set to testify on Tuesday and Wednesday, 9-10 July, before the Senate and House. The testimony will provide investors, traders, and consumers with valuable insights on the state of the US economy’s monetary policy and regulations ahead of the Fed’s upcoming rate decision on 30- 31 July.

US Releases

The world’s largest economy is in for an eventful week as numerous financial reports are scheduled, with the main ones being:

• Wholesale Inventories on Wednesday, 10 July

• Initial Jobless Claims on Thursday, 11 July

• Consumer Price Index (CPI) on Thursday, 11 July

• Product Price Index on Friday, 12 July 

• Consumer Sentiment on Friday, 12 July 

What will the data reveal about the world’s biggest economy, and how might this affect the US markets?

Q2 Earnings

Stock traders may want to keep tabs on this week’s Q2 earnings results from the following companies:

PepsiCo (PEP) on Thursday, 11 July

Delta Air Lines (DAL) on Thursday, 11 July

JP Morgan Chase (JPM) on Friday, 12 July 

Wells Fargo (WFC) on Friday 12 July 

Citigroup (C) on Friday 12 July

How will these big names perform, and what will the data reveal about their respective sectors? (Source: Nasdaq)

Conclusion

After an eventful last week, this week seems to be continuing the trend, with some key results and releases scheduled. Traders, consumers, and analysts may want to track the results to see how this might affect the financial markets and the economy as we enter the second half of 2024.