The governor of the US Federal Reserve, Michelle Bowman, expects inflation to continue to fall. And if the economic data continues to show that inflation is sustainably approaching the Fed’s two percent target, then according to Bowman it would be appropriate to gradually lower interest rates.
But she also stressed that patience is needed. We will find out what the other Fed members think when the minutes of the most recent interest rate meeting are published.
Inflation in India will be on display on Monday when the country releases its latest consumer price index. Forecasts suggest the annual consumer inflation rate could ease to 3.9% from 5.9%.
China is expected to report that new home prices fell further in July. If the forecast of a 5.0% decline is correct, this would be the 13th consecutive month of decline. Staying in China, retail sales are expected to show slight year-on-year growth of 3% in July.
To the results
Two heavyweights of the US consumer goods industry, namely Home Depot (NYSE: HD) and Walmart (NYSE: WMT) may shed some color on the purchasing behavior of American households. In May, the big-box retailer reported a decline in both first-quarter profits and revenue. Worryingly, Home Depot also reported a decline in store sales, which could be a sign that consumers have shied away from inflation.
Unlike Home Depot, cash-strapped households could be a boon for Walmart. In May, Walmart said it was profiting from the growing gap between the cost of cooking at home and the price of food at fast-food chains.
Hon Hai Technology (NYSE: HNHPF), also known as Foxconn, is the world’s largest electronics manufacturer. The company, which supplies Apple products, said in May that first-quarter profit was boosted by strong demand for AI servers. It also said it expects significant revenue growth in the second quarter.
A number of Asian e-trailers are provided as a result list. These include Sea GmbH (NYSE: SE), Tencent Holdings (NYSE: TCEHY), Alibaba Group (NYSE: BABA) and JD.com (NYSE: JD). In May, Sea Limited, which owns online shopping channel Shopee, reported a first-quarter loss of $23 million, but the company said it has a clear plan for profitable growth.
Meanwhile, Tencent, Alibaba and JD.com could provide important insights into China’s economy. The weakening economy in China could impact the advertising and fintech activities of these companies.
It is important to stay with China, Yanlord Land Group (SGX) said in February that 2023 would be exceptionally unusual, adding that China’s economic recovery remained challenging and that China’s real estate credit crisis, which began in 2021, continued throughout the year.
Other companies submitting results are Haw Par (SGX: H02), Wilmar International (SGX: F34), Olam Group (SGX: VC2) and StarHub (SGX:CC3).
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Disclosure: Haw Par is a component of DKIP.
