The US market will be closed for Labour Day on Monday. So, the rest of the world will have to fly solo at the start of the week.
The European Central Bank is expected to hike interest rates next week. At the last meeting in July, some members of the rate-setting committee said they would not have opposed another hike following an increase in June.
The US Fed does not meet until the following week. But all eyes will be on the continuing tug-of-war in the bond market. Bondholders have sent a clear signal to the Fed that they are not prepared to tolerate the rate-setting committee’s relaxed attitude towards inflation. They have pushed the 10-year Treasury yield up to 4.75%. The 30-year Treasury yield stands at 5.2%.
On the subject of inflation, the US will report CPI numbers for August. Both the headline inflation rate and the core inflation rate are expected to be above the Fed’s target of 2%. Will that be enough to change the mind of the doves on the rate-setting committee?
Apple’s (Nasdaq: AAPL) annual product launch will be closely watched as new CEO John Ternus takes the stage. There has been no shortage of speculation about what products will be unveiled. They include a foldable phone and AirPods with a built-in camera. But developing a Siri digital assistant that actually works would be a good start.
Software company Oracle (NYSE: ORCL) is expected to report strong growth in revenue, as demand for cloud infrastructure continues. That is almost a given. But the market is likely to focus on its cash burn as it spends heavily to achieve its AI ambitions.
Adobe (Nasdaq: ADBE) will need to demonstrate that it is still relevant in an AI-disruptive world. In June, the photoshop maker raised its annual profit forecast. But investors still think that it could be vulnerable to a shakeout as AI alternatives challenge its dominance.
Global recruitment agency Korn Ferry (NYSE: KFY) will report its first earnings since buying UK-headquartered AMS for an undisclosed sum. The question for the market is whether executive search will be relevant in an AI-enabled environment. The bulls claim that recruitment agencies are more akin to strategic advisors rather than just transactional recruiters.
Sun Hung Kai (SEHK: 0016) will report full-year results. Hong Kong property developers have been quietly reporting better results as the market gradually recovers. In the first half, SHK posted a drop in earnings on revenue that edged up 4.8%. But it increased its interim dividend that could suggest confidence going forward.
David owns shares in Apple through his DKIP portfolios.
