Guardian Weekly Market Report – Issue 125

Reports of Note Due This Week

Key economic indicators this week will be Federal Reserve Chair Jorome Powell’s testimony in front of the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. This will be followed by the Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday.

• Monday, July 8 – Late in the day at 3:00 PM we get the release of consumer credit.
• Tuesday July 9 – At 6:00 AM, NFIB optimism index will be released followed at 10:00 A.M. by Jerome Powell testimony in front of the Senate.
• Wednesday July 10 – At 10:00 A.M., we see the release of wholesale inventories for May. Also, Fed Chair Jerome Powell’s testimony to the House.
• Thursday July 11 – Weekly Initial Jobless Claims at 8:30 AM. They are expected to come in at 240,000, slightly higher than last weeks 238,000. Also being released is the Consumer Price Index (CPI) which is projected to be up 0.1% and Core CPI.
• Friday July 12 – At 8:30 A.M., the Producer Price Index for June will be released and is expected up 0.1%. Core PPI is also being released and is expected to be unchanged.

Geopolitics

At a summit in Kazakhstan, Russian President Vladimir Putin and Chinese President Xi Jinping praised the Shanghai Cooperation Organization (SCO) as a stabilizing global force. Founded in 2001 and now including India, Iran, and Pakistan, the SCO serves as a counter to Western influence. Putin emphasized the SCO’s role in fostering a multipolar world order and asserted that Russia-China relations are at their peak, with no intentions of forming blocs against others. Xi echoed these sentiments, calling Putin a longstanding friend and highlighting their cooperation amidst global changes.

Britain’s Labour Party has significantly defeated the Conservative Party, with Keir Starmer set to become the Prime Minister, replacing Rishi Sunak. According to exit polls, Labour is expected to secure 410 seats in Parliament, a substantial lead over the Conservatives’ 131 seats — their lowest in history. Starmer, a former prosecutor and centrist, aligns closely with President Joe Biden on foreign policies like support for NATO and Ukraine. However, his positions might clash with Donald Trump should he return to office.

Boeing has agreed to plead guilty to a criminal fraud charge related to the fatal 737 Max crashes, accepting a $243.6 million fine and further investments in compliance and safety totaling at least $455 million. This plea deal includes a three-year probation period with an independent compliance monitor and requires approval from a federal judge. Boeing’s board will also meet with the families of the crash victims as part of the agreement. This plea could impact Boeing’s business, particularly its dealings with the U.S. government.

Ukraine’s security service reported thwarting a coup intended to destabilize the government, which would benefit Russia amidst ongoing conflict. The plot, led by an anti-Ukrainian group’s co-founder, involved seizing parliament and announcing a new leadership. The suspects, aiming to stir unrest, now face charges of attempting to overthrow the state. This revelation came just before Hungarian PM Viktor Orbán’s controversial visit to Kyiv, amid his complex stance towards the EU, Ukraine, and Russia.