Wall Street faces a pivotal week as earnings season accelerates with reports from Tesla, Alphabet and a slate of blue-chip companies, along with some eye-opening predictions about what the Fed has in store for the rest of the year. Here’s what’s happening …
- Earnings season shifts to high gear this week, with almost 500 companies reporting, including a few members of the Magnificent 7. This morning, earnings are expected from Novartis, Charles Schwab, Interactive Brokers, Danaher, Capital One, 3M, Northrup Grumman, and General Motors, followed Wednesday by Alphabet (Google), Tesla, Philip Morris, Texas Instruments, IBM, AT&T, and CSX. Thursday numbers are due from Intel, RTX, T-Mobile, Thermo Fisher Scientific, SAP, Union Pacific, Lockheed Martin, and Blackstone, followed Friday by American Express, NextEra Energy, Verizon, Charter Communications, and Tenet Healthcare. *
- Deutsche Bank now expects the Federal Reserve to raise interest rates by a total of 50 basis points this year, citing inflation that remains above the Fed’s target, a steady labor market, and continued strength in the U.S. economy. The bank forecasts two quarter-point rate hikes, one in September and another in December, which would bring the federal funds rate to about 4.13% by year-end. Looking further ahead, Deutsche Bank expects the Fed to begin cutting rates in early 2028, with rates eventually settling into a more neutral range of 3.5% to 3.75%. Despite higher oil prices, the bank remains constructive on the economic outlook, forecasting roughly 2.2% GDP growth this year and next. It expects strong consumer spending, solid business investment, favorable financial conditions, and continued AI-related investment to help keep the economy on track. Business spending is expected to remain a key growth driver, while the housing sector is projected to return to growth after a weak year last year. **
- TSMC (Taiwan Semiconductor Manufacturing Co.) is speeding up its expansion plans in Arizona as demand for advanced chips continues to surge. The company says it sees a long-term growth trend driven by customers investing heavily in artificial intelligence. To meet that demand, TSMC is committing an additional $100 billion to expand its U.S. manufacturing operations. The move is supported by strong customer demand in the U.S. and continued government backing for domestic chip production. Reflecting its confidence in future growth, TSMC also increased its full-year capital spending forecast to $60 billion-$64 billion. ***
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