Week ahead: RBA meeting, Uber earnings, and PMIs

A tame week ahead for the markets to start August, with several key earnings reports on tap, such as Warren Buffett’s Berkshire Hathaway and ride-hailing app Uber, which will try to reassure investors after a disappointing showing in Q1.

The U.S., UK, and Eurozone will report their composite and services PMIs on Monday, while the Reserve Bank of Australia (RBA) will announce its policy decision in the early hours on Tuesday.

Here are the week’s key events:

Monday, August 5th: PMI day

A slew of Purchasing Managers’ Indices (PMIs) releases will kick off the week, with China’s Caixin Services PMI, the HCOB Eurozone Composite and Service PMIs, as well as the U.S. S&P Global PMI readings in focus.

Warren Buffett-led Berkshire Hathaway is also set to report earnings. BERKb stock is up by close to 24% so far this year, outpacing the S&P 500’s 14% rise.

The conglomerate recently offloaded a sizeable portion of its Bank of America (BofA) shares after a runup in BofA’s stock price. The sale brought down Berkshire’s stake in BofA to 12.3%, keeping it unchanged in its position as Berkshire’s second-largest holding after Apple.

Earnings: Berkshire Hathaway (BERKb)

Tuesday, August 6th: RBA meeting

The Reserve Bank of Australia (RBA) is set to announce its policy decision in the early hours on Tuesday. Markets appear to have abandoned bets of a further rate hike from the RBA and now expect an easing as early as November.

Australia’s headline inflation went up from 3.6% in Q1 to 3.8% in Q2, but the change was widely expected by economists. Significantly, the "trimmed mean" measure of inflation, a key indicator of underlying or "core" inflation closely monitored by the RBA, saw a slight decrease in Q2. It dropped from an annual rate of 4% to 3.9%, which indicates that the central bank will likely refrain from raising borrowing costs at its August 6 meeting. Australia’s current cash rate target is 4.35%.

Ride-hailing company Uber Technologies will also attempt to reassure investors in its Q2 earnings report after a disappointing showing in Q1. Recent stock market entries Reddit, which IPO’d in late March, and grocery delivery firm Instacart are also due to release their Q2 financial results.

Earnings: Amgen (AMGN), Caterpillar (CAT), Uber (UBER), Airbnb (ABNB), Reddit (RDDT), Instacart (CART)

Wednesday, August 7th: China, Germany trade balance; UK house prices

Economic data releases are relatively sparse today. Export-import figures from China could lead to some volatility. Investors will also be keeping an eye on the Halifax House price index in the UK, as well as the German industrial production figures and trade balance statistics for June.

Energy giant Occidental Petroleum, one of the biggest players in U.S. shale oil, reports earnings.

Earnings: Walt Disney Company (DIS), Occidental (OXY)

Thursday, August 8th: U.S. initial jobless claims

The number of people claiming unemployment benefits in the US dropped by 10,000 to 235,000 for the period ending July 20th, coming in below market expectations of 238,000. Despite this decrease, the claim count remained well above this year’s average, suggesting that although the US labor market is still historically tight, it has softened since its post-pandemic peak — and the Federal Reserve is sure to take note of the data.

As the Fed nears its inflation target, market commentators say the future direction of the jobs market now holds the key to interest rate cuts.

Earnings: Eli Lilly (LLY), Siemens (SIE)

Friday, August 9th: China inflation, PPI reading; Germany CPI

Germany will report its final inflation reading for July on Friday, with the preliminary figure coming in hotter-than-expected at 2.3% on July 30.

"The flash estimate of German inflation in July shows that there is still some way to go before it is back to the European Central Bank’s target of 2%," ING analyst Carsten Brzeski wrote after the data was made public. "For the ECB, [the] data releases have not made things any easier. In fact, in terms of growth, the divergence has widened, with Germany falling behind while countries like France and Spain are enjoying a decent recovery," he added.

China is also set to release its CPI and PPI figures, with the most recent inflation reading coming in at 0.2% YoY in June vs. an expected 0.4%.

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