Next week's key agenda: Focus on the Political Bureau meeting, the "Super Central Bank Week" of the US, Japan, and the UK, the US July non-farm payroll report, and the financial reports of the "Four Tech Giants" in the US stock market

July 29th-August 2nd Weekly Highlights of Major Financial Events, all in Beijing time:

Highlights of the Week: Political Bureau meeting, interest rate decisions by the three major central banks of the US, Japan, and the UK, US non-farm payrolls for July, China's PMI for July, Eurozone GDP for the second quarter and CPI for July, financial reports from Microsoft, Apple, Amazon, Meta, and the 2024 Paris Olympics.

Central Political Bureau Meeting of the CPC

At the end of July, the Central Political Bureau of the CPC may hold a meeting to focus on the assessment of the economic situation.

A recent discussion among economic experts and entrepreneurs pointed out that to consolidate and enhance the positive trend of economic recovery, it is necessary to adhere to innovation-driven development, cultivate and strengthen new growth drivers. It is important to give full play to the role of enterprises, increase policy support in a targeted manner, promote breakthroughs in more key core technologies. It is necessary to reform unreasonable systems and mechanisms, better mobilize the enthusiasm, initiative, and creativity of all parties, fully stimulate the innovative vitality of the whole society, organize and utilize various innovation resources effectively, and continuously unleash tremendous innovative power.

Fed Interest Rate Decision

The Federal Reserve will announce its interest rate decision early Thursday morning on August 1st Beijing time, followed by a press conference by Fed Chair Powell.

Wall Street generally expects that the Fed may maintain the federal funds rate in the range of 5.25%-5.5%, continuing to monitor the Fed officials' views on inflation and the labor market.

Some analysts believe that the Fed will release a clearer signal of a rate cut in the July policy statement, laying the foundation for the first rate cut of the year in September. The CME Group's FedWatch tool shows that the probability of a 25 basis point rate cut in July is less than 7%, while the probability of a rate cut in September is as high as 90%.

Recent data releases have sent optimistic signals, with strong economic growth and a slowdown in price increases. However, the Fed hopes for more assurance that inflation will continue to decline to the target level of 2%.

The decrease in price pressures, along with the rise in the unemployment rate, has made the Fed's two major goals—full employment and price stability—more balanced. Officials hope to curb inflation, but they also do not want to cause excessive harm to the labor market by maintaining high rates for an extended period.

Fed officials entered a "quiet period" starting last weekend, during which several Fed officials hinted at an impending rate cut Federal Reserve Chairman Powell said on the 16th that the recent three inflation data were "quite good," and there is no need to wait until it drops to 2% to cut interest rates. New York Fed President Williams stated that if the recent slowdown in inflation continues, it may be necessary to cut interest rates in the coming months, but it may not be done at the July meeting. Chicago Fed President Evans warned that if the Fed waits too long to cut rates, there is a risk of causing an economic recession.

US July Non-Farm Payrolls

On Friday, August 2nd, the market will welcome the July non-farm payrolls report, which the Federal Reserve is likely to see before announcing its rate decision.

The current consensus on Wall Street is that July non-farm payrolls are expected to increase by 175,000, likely falling to the level of April and marking the second lowest record in the past 9 months; the unemployment rate is expected to remain unchanged at 4.1%, the highest level in two and a half years, with average hourly earnings increasing by 0.3% month-on-month, unchanged from the previous value.

Although this report is unlikely to affect the July rate decision, it is expected to reinforce expectations of a continued cooling labor market, opening the door for a rate cut in September. Note that the September meeting is the last key rate cut window before the US election results are announced.

China July PMI

China's official and Caixin manufacturing PMI for July will be released on Wednesday, July 31st, and Thursday, August 1st, respectively, with economic activity expected to maintain its recovery momentum.

Earlier data released by the National Bureau of Statistics showed that China's manufacturing PMI for June was 49.5, unchanged from the previous month, indicating stable manufacturing business conditions. The non-manufacturing business activity index was 50.5, a 0.6 percentage point decrease from the previous month but still above the critical point, indicating continued expansion in the non-manufacturing sector. The comprehensive PMI output index was 50.5, a 0.5 percentage point decrease from the previous month but still above the critical point.

Eurozone Focus on GDP and Inflation Data

On Tuesday, July 30th, and Wednesday, July 31st, the Eurozone will release preliminary estimates for second-quarter GDP and July CPI inflation, providing important clues for whether the European Central Bank can cut rates again in September.

Analysts expect Eurozone GDP to grow by 0.5% year-on-year in the second quarter, slightly higher than the 0.4% in the first quarter, with a 0.2% quarter-on-quarter growth, slightly lower than the previous 0.3%. Growth momentum in Germany, Italy, and Spain may also slow down.

Harmonized CPI is expected to decrease by 0.1 percentage point to 2.4% year-on-year, while core harmonized CPI may slightly decline to 2.8% year-on-year.

Tech Companies Reporting Earnings

Next week, it is expected that 40% of S&P component companies will report earnings. Tech giants such as Microsoft, Apple, Meta, Amazon, AMD, Qualcomm, Arm, Intel, and others will release their quarterly earnings.

Microsoft is set to announce its fourth-quarter (second quarter) earnings after the market closes on July 30th (Wednesday Beijing time), with a focus on the growth of its cloud computing division and progress in AI.

According to data compiled by Visible Alpha, Microsoft's second-quarter revenue is estimated to be $64.37 billion, a 14.6% year-on-year increase; net profit is expected to be $21.88 billion, or $2.93 per share, a 9.3% year-on-year growth Apple will announce its third-quarter (second quarter) earnings after the local closing on August 1 (Friday Beijing time), focusing on iPhone sales in China and progress in AI.

Visible Alpha data shows that Apple's second-quarter revenue was $84.39 billion, up 3.1% from the same period last year. Net profit is expected to be $20.64 billion, or $1.34 per share, an increase from the previous year.

Bank of Japan and Bank of England Announce Interest Rate Decisions

On Wednesday, July 31, the Bank of Japan will announce its July interest rate decision, expected to keep rates unchanged, followed by a press conference by BOJ Governor Haruhiko Kuroda.

Despite this, there is still anticipation in the market for a rate hike at this meeting. The yen has surged in the past two weeks, with Deutsche Bank raising its assessment of the likelihood of a rate hike in Japan, believing that the probability of a rate hike exceeds 50%.

The Bank of England may announce its first rate cut in four years on Thursday, August 1, with a expected rate cut of 25 basis points. BOE Governor Mark Carney will hold a press conference following the announcement.

Other Important Data, Meetings, and Events

US Treasury Department Announces Quarterly Refinancing Notice

On Monday, July 29, the US Treasury Department announced its quarterly refinancing notice - the Treasury's borrowing plan for the next three months. A recent paper by "Dr. Doom" Nouriel Roubini stated that over the past year, the US Treasury has aggressively issued short-term bonds, resulting in a gap of over $800 billion in medium to long-term coupon debt, effectively equivalent to a 100 basis point rate cut by the Fed, almost offsetting all rate hikes from last year. This refinancing notice may provide more clues as to whether the Treasury is engaging in "stealth QE".

New Regulations for Private Equity Funds Officially Implemented

On August 1 this year, the "Guidelines for the Operation of Private Equity Securities Investment Funds" will be officially implemented. Private equity fund managers and fund sales institutions are required to disclose relevant information on private equity securities investment funds and their performance as required; those engaged in over-the-counter derivatives trading must also make corrections according to relevant requirements.

Shanghai Stock Exchange Officially Releases Real-time Quotes for the Shanghai Composite Total Return Index

To facilitate investors in observing the overall returns of the Shanghai stock market, the Shanghai Stock Exchange and China Securities Index Co., Ltd. have decided to officially release real-time quotes for the Shanghai Composite Total Return Index starting from July 29, 2024, with the index code and abbreviation adjusted to "000888" and "Shanghai Return".

State Council Information Office Holds Series of Theme Press Conferences on "Promoting High-Quality Development"

The State Council Information Office held a series of theme press conferences on "Promoting High-Quality Development". On July 29, Shen Changyu, Director of the National Intellectual Property Administration, attended to introduce the situation. On July 30, Zhao Zenglian, Deputy Director of the General Administration of Customs, attended to introduce the situation. On July 31, Wang Dongwei, Deputy Minister of Finance, attended to introduce the situation XPeng Motors Holds AI Autonomous Driving Technology Conference

On July 30th, XPeng Motors held an AI autonomous driving technology conference. The XPeng XNGP is about to receive the largest update in history, and the XPeng AI Tianji XOS 5.2.0 will also see a breakthrough.

Russia Lifts Ban on Gasoline Exports

Starting from August 1st, the Russian government has lifted the ban on gasoline and petroleum product exports. Previously, the Russian government had decided to temporarily ban gasoline exports from March 1, 2024, for a period of 6 months to address the growth in domestic market demand during the spring and summer. Depending on market supply conditions, the Russian government had temporarily exempted the ban on gasoline exports in July.

The 37th Hundred Flowers Awards for Popular Movies to be Held

From August 2nd to 4th, the 37th Hundred Flowers Awards for Popular Movies will be held in Chengdu, Sichuan Province, featuring a series of activities including the opening ceremony, nominee recognition ceremony, forums, film exhibitions, and more.

Beijing International Beauty Expo to be Held

From July 29th to 31st, the 30th Beijing International Beauty Expo will take place at the Beijing National Convention Center with over 800 brands expected to participate. The expo will showcase the latest products and technologies in the fields of beauty, hairdressing, nail art, tattooing, and skin management.

China Digital Entertainment Conference Opens

On August 2nd, the China Digital Entertainment Conference will kick off at the Guangzhou Library and last for 4 days. With the theme "Innovative Entertainment, Leading Digitization," the conference will feature various activities including the opening ceremony, keynote speeches by leading companies, partnership signings, establishment of the digital entertainment industry alliance, and business environment promotion. The conference will also include a digital entertainment technology and application exhibition with sections such as global cutting-edge technology, enterprise internationalization showcase, and immersive interactive experience.

IPO Opportunities

During the week of July 29th to August 2nd, there were no new A-share IPOs in China, while 5 stocks were listed on the US stock market.

A total of 10 new funds (combined A-class and C-class) were issued during the week.