Interest decision in Europe, Netflix balance sheet and previews of Vale (VALE3) and Petrobras (PETR3,PETR4): what to follow this week

The third week of July will be decisions. Attention turns to Europe, where the European Central Bank (ECB) will hold its monetary policy meeting next Thursday (21). Interest rates in the European Union are expected to be raised for the first time in 11 years. According to research by Reuters, with 63 economists, the ECB is expected to raise the rate by 25 basis points. But the market believes that the monetary authority could be even more aggressive. In the same survey, economists said European rates should be raised by 50 basis points. Inflation in the euro zone is expected to reach 7.6% in 2022, according to European Commission projections. On Tuesday (19), the consumer price index for the economic bloc comes out – the average of market projections points to a monthly high of 0.8%.

Thursday will also be decisive for Europeans for another reason: it is when the maintenance of the Nord Stream 1 pipeline should be completed. There are doubts whether Russia will resume gas supplies after the technical stop, as the country has suffered from string of sanctions since it invaded Ukraine in February. The risk of rationing has put pressure not only on European stock exchanges but also on the euro itself, which came to be cheaper than the dollar last week. That didn’t happen 20 years ago.

Still in Europe, the United Kingdom will release its unemployment rate next Tuesday (19), the consumer price index on Wednesday (20) and retail sales, on Friday (22). On the same day, the Central Bank of Russia will also make a decision on the country’s interest rate, currently at 9.5% – the same level it was before the start of the war in Ukraine.

In the United States, after the worse-than-expected inflation data released last week, investor attention is turning to the corporate earnings season. JP Morgan, Morgan Stanley and Wells Fargo have already released their second quarter numbers and performed worse than expected. This Monday (18), it is the turn of Goldman Sachs and Bank Of America and on Friday (22) the results of American Express will be released.

But the most awaited numbers of the week are those of technology companies. Netflix kicks off the swing season big techs, releasing their numbers on Tuesday (19). The company itself predicts having lost 2 million subscribers in the second quarter of 2022. Analysts consulted by FactSet they expect earnings per share of $2.96 and revenues of $8.03 billion.

On Wednesday (20), the balance sheet of Tesla, by Elon Musk. The electronic car maker continues to face problems with a shortage of components from China, due to recent lockdowns in the country. However, analysts consulted by the FactSet forecast an increase in earnings per share ($1.86) and earnings ($16.6 billion).

Balance sheets are also highlighted in Brazil

The Brazilian agenda of indicators is practically empty this week and Congress goes into recess after enacting the PEC dos Auxílios. As in the United States, the highlight is also the corporate calendar. Here, the balance sheet season is still in its infancy and on Wednesday (20), Weg (WEGE3) will release the numbers for the second quarter.

After the operational numbers of shopping malls and construction companies, now it’s time for blue chips present their previews. On Tuesday, Vale’s production figures (VALE3) for the second quarter will be released. Citi predicts stability for iron ore, at 76 million tons. As a result, production in the first half of the year should total 140 million tons, 4 million less than in the same period last year. On Thursday, Petrobras’ production and sales figures (PETR3;PETR4) will be released.

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