What to Watch for during the Week of July 28

The world markets will be attuned to the U.S. markets the week of July 28th for many reasons. This coming week will be packed with corporate earnings reports, data from the U.S. government, and geo-political news from Europe.

Corporate Earnings Reports

This week in the U.S. there are 140 companies within the S&P 500 that will be reporting earnings. Last week we saw the market appear pleased by the earnings reports of Apple and Microsoft in the middle of the week; only to sell-off after a less than stellar second quarter earnings performance from Amazon towards the end of week 

Investors will want to see the trend which has been forming with the 2014 second quarter earnings season, with regards to the S&P 500. Sixty-three percent of S&P 500 companies that have reported so far this second quarter have beaten revenue estimates and 69% have beaten their profit estimate. S&P 500 companies that have reported to date have grown revenue by 3.5% while earnings have grown by 6.5%. At the end of this week, investors will know if this trend will continue with the remaining 50% of S&P 500 companies still to report.

U.S. Government Data

Starting today July 30th the U.S. has release GDP numbers for the second quarter. Analysis to follow.

The big number, the nonfarm payrolls and nonfarm private payrolls, will be reported before the markets open in the U.S. on Friday, August 1, 2014. This number could move the market one way or the other with either an uptick or downtick in the unemployment rate.

Europe

Europe takes a back seat to the U.S. this week because of the crucial U.S. government data being released. Investors will be interested if the E.U. and the U.K. tighten existing sanctions against Russia. Lower than expected data on German confidence sent European markets south towards the end of last week; even after the U.K. posted in-line information on output.

Latin America

Argentina is faced with default once again; the first since 2001 but overall this will represent the third time in 30 years that the country of Argentine defaulted on their debt. If Argentina fails to make a $539 million payment today Wednesday, July 30th the missed payment will set the default ball rolling. The problem stems from their 2001 default agreement when 90% of the investors agreed to the plan. The remaining 10% proceeded to take Argentina to court to collect their money. Argentina and the 10% holding out have met continuously since a U.S. Court ruling two months ago but have failed on coming to a mutual agreement on payment.

Outcome

This week could set the tone, for trading and investing, for much of the remainder of the summer. The markets have been able, to date, to think past the sanctions placed on Russia, cries of a market bubble, and the continued reel-in of the Quantitative Easing policies of the U.S. Federal Reserve. Everyone will have little clearer picture of the corporate world after this week.