Big Earnings Week Ahead with Microsoft, Meta, Boeing, and Coca-Cola; Fed and ECB expected to raise interest rates

The forthcoming week marks a significant period in the earnings season, with 150 S&P firms, including major players like Microsoft (MSFT), Meta Platforms (META), Boeing (BA), and Coca-Cola (KO), slated to disclose their earnings. However, this season’s corporate activities extend beyond mere earnings reports. A pivotal negotiation between United Parcel Service (UPS) and the International Brotherhood of Teamsters is also under the spotlight.

The High-Stakes Labor Contract

UPS and the International Brotherhood of Teamsters are presently in negotiations over a new labor contract. This agreement affects nearly “340,000 workers” and is under strict observation, particularly in light of the looming expiry date on July 31. The potential of a strike holds significant economic implications. Given that UPS handles around 28% of the 75 million packages delivered daily in the U.S., any disruption in service could trigger widespread consequences. Discussions are scheduled to resume on July 25.

Upcoming Central Bank Meetings

Central bank meetings are also important in the week ahead. After a pause in June, the U.S. Federal Reserve is projected to hike interest rates by a quarter point. Despite a slowdown in inflation and economic growth, the Fed’s statement is expected to uphold the current policy rate guidelines, emphasizing its commitment to “data-dependent decision-making.”

Expectations for the European Central Bank

In a parallel move, the European Central Bank (ECB) is also anticipated to increase its benchmark rate by 25 basis points. Furthermore, the ECB is not likely to dismiss the possibility of another rate hike in September, thereby underlining the global trend of monetary tightening.