Jul 19, 2021
The equity markets will try to regain their footing this week following the declines posted last week. Although the earnings have so far been better than expected, the outlook for inflation has taken on a new tone despite the Fed's apparent lack of concern. Fed Chief Jerome Powell says it will still be some time before tapering begins or interest rates are raised which means investors and consumers should expect significant price increases over the next few months.
Although the peak of peak earning season is still a few weeks away, the earnings action will heat up this week with reports from several dozen S&P 500 companies and a few Dow components as well. The revenue and earnings results will be of key importance but the market's focus will be on signs of inflation and how S&P 500 companies are navigating the problem. If it looks like inflation will start cutting into earnings, the broad market could be in for a big decline.