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Investors will be hoping for a better start on Monday after a tumultuous week that saw the Dow Jones extend its losing streak to seven sessions. Not since the 2011 debt ceiling has this occured. Once again, China could define the trend and market sentiment mid-week, with Industrial Production and New Loan data expected to be released.
In Europe, Greek bailout meetings look set to conclude, with both sides confident that terms will be agreed upon before the looming ECB bond payment deadline on the 20th of August.
On the economic front, investors have priced in a 0.1% rise in the Producer Price Index for the July period. This will be announced on Friday, with important Retail Sales, Import and Export Prices expected on Thursday. Other important reports to be released include the Treasury Budget, Industrial Production, Capacity Utilization and Consumer Sentiment.
Investors will continue to digest Friday’s Non-Farm Payrolls figures on Monday, with the S&P futures pointing to a slight rise on the open. Chinese markets rallied 4.9%, with officials indicating that stabilization measures would be kept in place in the short term.
According to several news sources, billionaire investor Warren Buffett and his company, Berkshire Hathaway, are expected to confirm the $30 billion acquisition of Precision Castparts Corp. This will be the largest investment for the Nebraska-based holding company. Such speculation follows a 37% fall in earnings.
No important economic news will be released during the session.
Chinese New Loans data could drive market volatility on Tuesday, with an expectation of a considerable reduction in approvals from the previous period. Recent measures to support the equity market, coupled with lending restrictions, could put the figure at 725 billion yuan. Previously this stood at 1.279 trillion yuan.
The Bureau of Labor Statistics in the U.S. will inform the market of preliminary Productivity and Unit Labor Costs for the second quarter. Although both reports will have little impact on market volatility, analysts will be using the data in conjunction with recent jobs data. Productivity is expected to rebound from a loss of 3.1% in the previous period to a gain of 1.6%.
Economists will be meticulous in their analysis of Chinese Industrial Production figures on Wednesday in light of recent speculation of a slowdown in the world’s second largest economy. Anything below the year-on-year 6.7% Industrial Production forecast could trigger a spike in market volatility. The U.S. Treasury Budget will also be released during the lunchtime session.
U.S. Retail Sales will be a key consideration for the Fed when determining its monetary policy, and could play on market gains on Thursday. Economists are looking for a 0.5% rise in July, which would be a turnaround from a 0.3% loss from the previous month. Import and Export Prices will also be reported during the morning session.
Core PPI, PPI, Industrial Production, Capacity Utilization and Consumer Sentiment will round out a busy week on the economic calendar. The University of Michigan Sentiment indicator is expected to rise to 93.5 from 93.1 in August.
Retailers and sales figures will command much of the attention during the week. Investors, however, will be looking for a quick wrap up of the Greek bailout agreement, with the August deadline looming.