Central Banks and Corporate Profits Fuel Optimism on Wall Street

Prepared by: Benemeen Zarzour

Business results remain at the center of Wall Street's interest as the debate over the Federal Reserve's decision to cut interest rates at the end of the month intensifies, but the global economic slowdown is the main preoccupation preventing continued rise in stocks and fueling frustration.
The market is receiving results from 130 companies listed on the S & P this week, the largest of which are giant technology companies AlphaBate, Amazon, McDonald's, Boeing and United Technologies.
According to Reventive estimates, the second quarter GDP report predicts a 1.8% drop in growth, compared to 3.1% for the first quarter, according to Reventive estimates. With business investments. On Tuesday, the market will receive a report on home sales and Thursday, the report of the advanced economies index.
In the total absence of Fed members this week, the market discusses the magnitude of the expected reduction in interest rates, John Williams, a board member last Thursday, doubted a reduction of 50 percentage points and an additional 25 percentage points. Surveys of fund managers indicate that 43% of respondents believe that the reduction will be 50 percentage points and that the board will act faster than expected.
Analysts believe that markets have lowered the minimum by 25 points, which has deprived it of its ability to stimulate the economy, which may require a step forward to strengthen long-term stimulus , and they think that the Council will act even if the economic data improve, because they are very related to the slowdown of the world economy. This was confirmed by Council President Jerome Powell.
During the week that separates the markets from the cup, investors will focus on corporate profits. Last week, the market experienced an intensification of anticipation, as the results of some companies were not encouraging and others reducing their profit forecasts. 65% of companies listed on the S & P 500 Index, which released its results last week, reported results exceeding badysts' expectations. What worries the market forces is the third and fourth quarter exams, all of which go in the lowest direction.
The decline in corporate earnings in the second quarter coincided with signs of weaker overall economic performance. If the figures reveal a growth rate of less than 2% of the economy, it will be the first since 2017. Analysts are looking at consumer behavior by indicating their spending for the second quarter and whether business spending have also decreased.
The board of directors of the European Central Bank (ECB) on Thursday closely follows the forecasts of lower interest rates of deposits to less than 0.5% instead of the current 0.4%. Analysts also expect some emerging markets, including Russia and Turkey, to lower interest rates in the coming days after being cut by South Korea, Indonesia and South Africa.
There are also bets on the intervention of the US Federal Reserve under political pressure to curb the rising dollar, which has rebounded under trade disputes. If the board fails to control the dollar, it will be a problem for companies that realize the bulk of their profits abroad.