Dow Jones, Nasdaq 100, S&P 500, DAX 30 Fundamental Forecast

Dow Jones, Nasdaq 100, S&P 500, DAX 30 Fundamental Forecast:

• US stock markets will await earnings from the countrys largest banks and other influential companies as earnings season begins in earnest

• Nearly devoid of drivers, the German DAX 30 will look outside its borders for influence

• New to equity markets？ Read about earnings season and the impact it has on the stock market.

Dow Jones, Nasdaq 100, S&P 500 Fundamental Forecast: Earnings Arrive

After doubling down on a dovish policy path, the Dow Jones, Nasdaq 100 and S&P 500 jogged to record highs. With trade wars out of focus and monetary policy effectively locked in ahead of July‘s meeting, earnings season will look to take the reigns as the driving fundamental force behind the three major US indices. In the week ahead, the country’s biggest banks will kick off the start of the season and could highlight the impact of a lower Federal Funds rate.

As a key factor in determining a financial institutions profit margin, the prospect of a lower Federal Funds rate could result in tempered forecasts for upcoming quarters which may momentarily weigh on share prices in the financial sector. Consequently, the Dow Jones will take its cues from Goldman Sachs (GS) and JP Morgan Chase (JPM) on Tuesday as the two banks make up over 8% of the Index.

Dow Jones Price Chart: 4 - Hour Time Frame (May – July) (Chart 1)

On the other hand, the Nasdaq 100 will take its cues from the first FAANG member to report – Netflix (NFLX). Netflix and its FAANG companions are afforded significant influence on tech sentiment and a string of poor earnings from the group could depress the outlook for the whole sector. To that end, Netflix will be an important barometer for the rest of the group – but new entrants to the streaming space may cloud the companys outlook. Check out @PeterHanksFX for equity coverage and earnings insight.

Nasdaq 100 Price Chart: 4 – Hour Time Frame (May – July) (Chart 2)

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DAX 30 Fundamental Forecast

While the US markets have a full plate, the DAX 30 may find itself longing for drivers. With an exceedingly sparse economic calendar, the German equity index may derive influence from Chinese GDP data on Monday and economic survey expectations on Tuesday. Further, the Indexs statistically significant positive correlation with the S&P 500 may see US earnings extend their influence across the Atlantic.

DAX 30 Price Chart: 4 – Hour Time Frame (June - July) (Chart 3)