Apple (AAPL) reports its quarterly numbers as earnings season continues apace on both sides of the Atlantic, whilst some big macro releases from the US should tell investors a lot more about where the Federal Reserve is taking policy.

Apple earnings


The world’s biggest company by market capitalisation delivers its third quarter results after the close on Tuesday.  The consensus estimate for earnings per share (EPS) is $1.57, against $1.42 a year before.

Looking beyond headline EPS figures though, investors will be more focused on what the guidance is for iPhone sales over the coming quarters and any clues about the launch of a new series of devices that it’s hoped will spark a new sales ‘supercycle’. 

The other area to watch is the services revenue. This fast-growing stream, which Apple wants to double in four years, is seen as offering a more durable and sustainable earnings compared with hardware upgrades.


Nonfarm payrolls


First Friday of the month means only one thing: it’s nonfarm payrolls day. The monthly change in nonfarm employment is always closely watched as arguably the best indicator of the health of the US economy and future course of monetary policy.

The other number is the average earnings, which is the critical leading indicator for pushing up inflation to the Fed’s target rate.

The release usually results in some volatility in the US dollar, US Treasury notes (particularly the more policy sensitive 2-year bond), and US equities.

US inflation


On Tuesday, the Fed’s preferred measure of inflation, the core PCE price index, is released. Core inflation has remained stubbornly low and this is presenting a problem for Fed officials as they seek to tighten monetary policy. Policymakers keep saying the soft data is transitory and they expect inflation to bounce back. The longer it goes on the less in touch they look with the data. Investors are already full of doubts with the US dollar pared back to its weakest in over a year. A strong PCE reading – anything above the 0.1% that’s been seen lately – could halt the rout in the greenback as it might signal the Fed is on course to hike again before the year is out.


Bank of England


The Bank of England’s interest decision comes on Thursday. It’s the first meeting of the Monetary Policy Committee since some fairly hawkish noises were made by a number of rate-setters. Expectations that the Bank could hike rates to 0.5% this month rose after 3 policymakers voted for higher rates last time. However a surprisingly large drop in inflation last month sent the hawks packing and all but killed off any chances of a hike in the summer. GBPUSD remains policy sensitive around the $1.30 level whilst there is little on the Brexit front to drive price action.

DAX earnings


Plenty of earnings from Germany should keep the DAX pretty volatile this week. Thursday is the biggest day when Adidas (ADS), Bayerische Motoren Werke (BMW), Beiersdorf (BEI), Deutsche Telekom (DTE), Merck KGaA (MRK)  and Siemens (SIE) all report.  Combined these account for one quarter of the Germany 30 by index weighting so should be a day for the diary if you’re trading the DAX. Siemens results in particular should have an effect as it makes up around 10% of the DAX by weighting.

FTSE interim results


It’s another busy week for earnings in the UK, with a host of FTSE interim results due out. BP (BP), HSBC (HSBA), BAE Systems (BA), Inmarsat (ISA), Centrica (CNA), Taylor Wimpey (TW), Fresnillo (FRES) and Rio Tinto (RIO) are among the biggest companies to report half-year numbers. Also watch for the quarterly trading update from Next (NXT) following a pretty rocky time for its share price.

Economic Calendar

(All times BST)

Monday, 31 July

Tentative – UK inflation report hearings

00:50 – Japan preliminary industrial production

02:00 – China manufacturing & non-manufacturing PMIs

02:00 – New Zealand ANZ business confidence

07:00 – German retail sales

09:00 – Italian unemployment rate

09:30 – UK net lending to individuals

10:00 – CPI and core CPI inflation flash estimates

14:45 – US Chicago PMI

15:00 – US pending home sales

Tuesday, 1 August

02:45 – China Caixin manufacturing PMI

05:30 – Reserve Bank of Australia interest rate decision

06:00 – Bank of Japan core CPI

08:15 – Spanish manufacturing PMI

09:00 – Eurozone final manufacturing PMI

09:30 – UK manufacturing PMI

10:00 – Eurozone preliminary flash GDP

13:30 – US core PCE price index, personal spending

15:00 – US ISM manufacturing PMI

23:45 – New Zealand unemployment rate, employment change

Wednesday, 2 August

00:01 – UK BRC shop price index

02:30 – Australia building approvals

08:00 – Spanish unemployment change

09:30 – UK construction PMI

13:15 – US ADP nonfarm employment change

15:30 – US weekly crude oil inventories

Thursday, 3 August

02:30 – Australia trade balance

09:00 – Eurozone final services PMI, ECB economic bulletin

09:30 – UK services PMI

12:00 – Bank of England interest rate decision, monetary policy summary, inflation report

12:30 – Press conference with BoE governor Mark Carney

13:30 – US weekly unemployment claims

15:00 – US ISM non-manufacturing PMI, factory orders

Friday, 4 August

02:30 – RBA monetary policy statement, Australia retail sales

07:00 – German factory orders

09:00 – Italian retail sales

13:30 – US nonfarm payroll change, average earnings

13:30 – Canada employment change, trade balance

Corporate Calendar


Monday, 31 July

HSBC (HSBA) – interim results

Old Mutual (OML) – interim results

Trinity Mirror )TNI) – interim results

Tuesday, 1 August

Apple (AAPL) – Q3/2017, EPS estimate 1.572

Pfizer (PFE) – Q2/2017, EPS estimate 0.658

Xerox Corp (XRX) – Q2/2017, EPS estimate 0.818

BP (BP) – second quarter results

Centrica (CNA) interim results

Direct Line Insurance Group (DLG) – interim results

Taylor Wimpey (TW) – interim results

Rolls-Royce Holdings (RR) – interim results

Fresnillo (FRES) – interim results

Wednesday, 2 August

Mondelez (MDLZ) – Q2/2017, EPS estimate -0.464

Aggreko (AGK) – interim results

BAE Systems (BA) – interim results

Rio Tinto (RIO) – interim results

RSA Insurance Group (RSA) – interim results

Smurfit Kappa Group (SKG) – interim results

Travis Perkins (TPOK) – interim results

William Hill (WMH) – interim results

AG Barr (BAG) – trading update

Commerzbank (CBK) – Q2/2017, EPS estimate 0.070

Deutsche Lufthansa (LHA) – Q2/2017, EPS estimate 1.023

Hugo Boss (BOSS) – Q2/2017, EPS estimate 0.780

Vonovia (VNA) – Q2/2017, EPS estimate 0.475

Thursday, 3 August

Aviva (AV) – interim results

Esure Group (ESUR) – interim results

Ferrexpo (FXPO) – interim results

Inmarsat (ISA) – interim results

London Stock Exchange Group (LSE) – interim results

Shire (SHP) – interim results

Serco Group (SRP) – interim results

Next (NXT) – Q2 trading update

Adidas (ADS) – Q2/2017, EPS estimate 1.315

Bayerische Motoren Werke (BMW) – Q2/2017, EPS estimate 3.140

Beiersdorf (BEI) – S1/2017, EPS estimate 1.712

Deutsche Telekom (DTE) – Q2/2017, EPS estimate 0.285

Merck KGaA (MRK) – Q2/2017, EPS estimate 1.594

Siemens (SIE) – Q3/2017, EPS estimate 1.613

Friday, 4 August

Berkshire Hathaway (BRK/A) – Q2/2017, EPS estimate 2,800.985

Merlin Entertainments (MERL) – interim results

Royal Bank of Scotland Group (RBS) – interim results

Allianz (ALV) – Q2/2017, EPS estimate 3.443

Source: Bloomberg


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