Strong start to earnings

The first round of US earnings reports from the 2nd quarter have been strong out of the gate, says the Private Bank’s Germany CIO Dr. Ulrich Stephan. "A good earnings season start so far", though he notes that it is a bit uneven. "If you look at the smaller companies, they are much more affected by the tariffs", he says, noting that larger companies with a more global footprint are deriving some benefit from a weaker dollar.

Headlines around the possibility that President Trump might try to remove Federal Reserve Chairman Jerome Powell before his term ends next year have had an impact on the dollar and some interest rates, Ulrich says.

"If President Trump nominates a new candidate in September", which Ulrich says would be earlier than usual, "we would have a kind of shadow-chair to the Fed."

In the week ahead, Ulrich points to the coming decision from the European Central Bank, as well as a pickup in the corporate reports, as important to watch. "We will be busy."

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