Stocks bounded higher last week, helped by positive earnings developments and fresh signs of progress in the trade battle. The S&P 500 is within striking distance of a record high and the Nasdaq has pulled within one point of its all-time peak*.
Investors remain eager for news on the trade front. The August 1st deadline for the Trump administration to reach new tariff agreements appears to be getting closer, with signs of progress in Japan and South Korea. Reports suggest that a deal with the EU could also be close*.
Inflation data also remains in focus, with the consumer price index and producer price index due out Tuesday and Thursday respectively. Hotter prints could raise concerns about the pace of economic growth, possibly weighing on expectations for a September rate cut from the Federal Reserve*.
Earnings remain a key driver of market direction, with bank earnings set to start the week*. Schwab experts note that big bank stocks have been on a strong run since late June, helped by a solid yield curve and by the ability of many to announce share buybacks and dividend increases. This strength has come despite the fact that analysts haven’t really raised their earnings expectations much at all, in some cases actually lowering them*.
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