What happened last week…
The meeting minutes were released for the Federal Reserve’s July 30-31 gathering where interest rates were left unchanged at 5.25% to 5.50%. According to the minutes, “In discussing the outlook for monetary policy, participants noted that growth in economic activity had been solid, there had been some further progress on inflation, and conditions in the labor market had eased… The vast majority observed that, if the data continued to- come in about as expected, it would likely be appropriate to ease policy at the next meeting.” The next Federal Open Market Committee meeting takes place September 17-18. According to the CME FedWatch Tool, as of August 23, there is a 36.5% probability of a 50-basis point reduction and a 63.5% probability of a 25-basis point reduction.
At the annual economic conference in Jackson Hole, Federal Reserve Chairman Jerome Powell said, “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” In the opening of his speech Powell said, “Inflation has declined significantly. The labor market is no longer overheated, and conditions are now less tight than those that prevailed before the pandemic. Supply constraints have normalized. And the balance of the risks to our two mandates has changed.”
According to a long-term study, Eli Lilly’s (LLY) weight loss drug can reduce the risk of developing Type 2 diabetes by 94% in overweight or obese adults with prediabetes. The active ingredient tirzepatide is used in the company’s weight loss injection Zepbound and diabetes drug Mounjaro. The Centers for Disease Control and Prevention says more than 1 in 3 American adults have prediabetes, or 98 million people.
Existing home sales for July beat expectations (3.93 million) as it increased to 3.95 million from the upwardly revised 3.90 million (from 3.89 million). The reading snaps a streak of four straight monthly declines. New home sales for July beat expectations (630,000) as it increased to 739,000 from the upwardly revised 668,000 (from 617,000). It is the highest reading since May 2023 (741,000).
The following companies reported earnings last week: PANW, LOW, TGT, INTU.
This week…
The following companies report earnings this week: CRM, NVDA, OKTA, LULU.
The GDP growth rate (second estimate) for Q2 2024 is expected to match the first estimate of 2.8%. The Q1 2024 rate of 1.4% was a decrease from the Q4 2023 reading of 3.4% and the lowest growth since the contractions during the Covid pandemic.
Thanks for Reading!
- The Rockline Team