Economic calendar: US companies’ earnings in the spotlight

Summary:

• Ifo indices to show further deterioration in business climate

• Market consensus suggests that DOE data will confirm drop signalled by API

• Three Dow Jones companies to report earnings today

Taking a look at Wednesday’s calendar we can spot some noteworthy readings scheduled. In the morning the Ifo indices will be released and are expected to deteriorate further. During the US session data concerning the US housing market as well as the oil inventories will be in the spotlight. Stock traders should be aware of a vast array of notable US companies reporting earnings today, including Facebook or Coca-Cola. Last but not least, additional volatility may spur across the markets as the European Commission President Juncker will meet with the US President Trump to discuss trade issues. We have mentioned this topic in our morning analysis.

9:00 am BST - Germany, Ifo Business Climate. After improving throughout the 2017 the German business climate measured by Ifo Institute deteriorated sharply in the first half of 2018. It is worth to note that the pace of declines of the expectations subindex outpaced the current assessment one hinting that the German companies look less favourable at the future. Today’s reading is expected to show Ifo Business Climate index slide from 101.8 to 101.5 pts. The expectations and current assessment gauges are also forecasted to deteriorate slightly.

3:00 pm BST - US, New Home Sales for June. The latest existing home sales data showed a drop signalling that the demand houses in the US economy may be weakening. This development may be confirmed by today’s new home sales reading as it is expected to decline from 689k to 670k. However, even if estimates are confirmed by the actual data we should not doom the US economy to failure just yet as the gauge will still sit at its highest levels since late-2007.

3:30 pm BST - Crude Oil Inventories. The yesterday’s API reading showed a 3.2 m drop what in combination with optimism regarding possible stimulus in the Chinese economy helped oil prices finish trading much higher. DOE inventories data is expected to show a 2.23 m decline in oil stocks and a 1.2 m drop in the gasoline reserves. However, distillates are forecasted to see a build of 403k. One should be aware that any news regarding the recently reignited dispute between the US and Iran may overshadow the incoming data flow in terms of market reaction.

Notable US companies reporting earnings today:

• Visa (V.US)

• PayPal Holdings (PYPL.US)

• Coca-Cola (KO.US)

• General Motors (GM.US)

• Facebook (FB.US)

• Ford Motor (F.US)

• Boeing (BA.US)

OIL.WTI failed to break below the support level at $66.50 giving oil bulls a chance to catch a breath. We have seen a bounce in the recent days but the resistance level at $69.50 holds firm and unless it is broken we may have to wait for a longer upward movement. Source: xStation5