Whats up in the markets right now？ FOMC & Tech Earnings 

Date: July 27th, 2022

Attention turns to the US today as important economic data is due out. Find out what‘s moving the markets in today’s article.

Earnings – Google Leading the Way？

Earnings last night were disappointing as Microsoft slumped 3% after missing on revenue and earnings. However, Google boasted strong advertising numbers, proving that the searching powerhouse is still attracting users. As a result, shares were up 4%.

The focus will not shift to two technology giants, Amazon and Apple. They will both be releasing earnings on Thursday. Both stocks are down heavy this year, but will the lower expectations now seem to put these tech firms in a stronger position？ Either way, volatility will be high on release.

Event of the Week – FOMC

Staying in the US, there is another episode of ‘how to steer a country away from a recession’ when the Federal Reserve releases its next batch of interest rate hikes. The Fed has already hiked interest rates by 150 bps in 2022 and is expected to raise rates by another 200 bps for the rest of the year. If the Fed announces a 75-bps hike today, then it will be steepest consecutive hike since the 1980s.

Despite this, the US growth picture is still deteriorating and the yield curve inversion could worsen. It is already at the deepest since 2000.What happened next？ The dot com crash, i.e., the rise and fall of technology stocks.

Why is this relevant now？ Well, every single recession over the past 40 years has been predicted by a yield curve inversion like this one. Strap in.

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