Must read: Federal Reserve, Meta, Shell, Next, UK banks

Next week looks set to be a mega week for markets both on the corporate and economic side. Aside from the 1 August tariff deadline, we get some important data including Friday’s US jobs report and a slew of inflation and GDP figures from the US and Europe. 

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Central bank watchers will be busy with the Federal Reserve on Wednesday and the Bank of Japan on Thursday both deciding on interest rates. The earnings calendar is nonstop on both sides of the Atlantic. Tech giants like Meta Platforms Inc Class A (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) taking centre stage. And in the UK focus will be on earnings from Barclays (LSE:BARC) and Standard Chartered (LSE:STAN) in the financial sector. Plus, Rolls-Royce Holdings (LSE:RR.), Next (LSE:NXT), Unilever (LSE:ULVR) and BAE Systems (LSE:BA.) among others. Oil giants will be centre stage too in the US and UK with Chevron Corp (NYSE:CVX), Exxon Mobil Corp (NYSE:XOM) and Shell (LSE:SHEL) all releasing earnings.

FED INTEREST RATE DECISION 

The Federal Reserve is expected to keep interest rates on hold in the range of 4.25-4.5% at the conclusion of its two-day policy meeting on Wednesday. The Fed has held off from cutting interest rates all year, last easing monetary policy in December. 

While markets are still expecting a Fed rate cut in September, the odds of a reduction have been coming down on the back of hot inflation data. The annual rate of inflation is above target, hitting 2.7% in June, a five-month high up from 2.4% in May, sparking concerns about price pressures in the US economy as Trump’s tariffs start to weigh. Markets will be looking for more clues into inflation next week and in turn the Fed from next week’s PCE price data, the Fed’s preferred measure of inflation. 

At the end of last week, Fed governor Chris Waller called for an immediate rate cut - he is more worried about a US economic slowdown and less worried about tariffs pushing up inflation. 

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Meanwhile, the strength of the Fed’s independence in setting monetary policy is being tested by the current US administration. President Trump has been clashing with Fed Chair Jay Powell. Trump has repeatedly called for the Fed to slash interest rates and has even called for Powell to resign. Trump is also at loggerheads with the central bank over a $2.5 billion refurbishment. 

With Powell’s term as chair set to end in May 2026, there are concerns about who Trump nominates next. It is likely he will choose a major dove which would ring alarm bells for the inflation outlook. However, even if Powell’s successor wishes to sharply reduce interest rates, the replacement will still have an uphill battle to get the majority of FOMC panel members on side. The US dollar has majorly fallen out of favour under Trump’s term. This year, the greenback shed more than 10% in the first six months of 2025, the worst H1 performance since 1973. International investors have shunned the currency amid the tariff uncertainty, high levels of government borrowing and Trump’s loud calls for lower rates. The US dollar is no longer considered to be the safe haven it once was.

META 

Meta will announce its second quarter results on Wednesday 30th July. 

According to Refinitiv, Meta is expected to report earnings per share of $6.07 down from $6.43 q/q and net income is seen coming in at $14.97 billion down from $16.64 billion q/q.  However revenues are expected to rise to $44.9 billion, versus $42.3 billion q/q.

After a difficult first quarter for mega cap tech when the sector took a major hit from Trump’s tariff threats, the ‘Magnificent Seven’ appears to be back in vogue. In fact, according to Bank of America’s latest monthly survey, investors have been buying back tech stocks at the fastest pace in 16 years. Meta has been a major beneficiary of this shift with shares rebounding by almost 50% off the mid-April low. 

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Analysts have high hopes for tech earnings this quarter, with big beats anticipated thanks to the explosion of artificial intelligence. Last week CEO Mark Zuckerberg said Meta is planning hundreds of billions of dollars of investment into AI, building a data centre the size of Manhattan. In April, Meta released a standalone AI app to compete with ChatGPT and Grok and investors will be paying close attention to how it has been performing. 

Focus will also be on Meta’s daily active users as always, which hit 3.43 billion last quarter, ahead of expectations. Plus, analysts will be watching to see whether the macroeconomic uncertainty has hit Meta’s advertising revenues. Elsewhere, investors will be looking out to see if Thread, Meta’s rival app to X, is still growing monthly active users. And attention will also be on the scale of losses at its Reality Labs division. In the first quarter, it reported an operating loss of $4.2 billion in first quarter, which was less than analysts had pencilled in for $4.6 billion.

SHELL

Shell will announce its second quarter results on Thursday 31st July. According to Refinitiv, quarterly net profit is expected to hit $3.8 billion down from $5.58 billion q/q. 

Expectations for its gas and LNG performance have come down after Shell cut its production guidance earlier this month. 

In its previous quarterly update, Shell reported a 28% drop in Q1 net profit, ahead of analysts’ expectations but down from $7.73 billion in the same period last year. Unlike BP, Shell maintained its $3.5 billion buyback programme over three months.  

It has been a volatile period for oil prices – brent crude is down around 10% year-to-date but hit a five-month high in June lifted by tensions in the Middle East following Israeli and US attacks on Iran. However, OPEC+ appears to be keeping a lid on oil prices after it agreed to switch from cutting to boosting production this year. Concerns about a global economic slowdown as US tariffs take their toll are also putting downward pressure on oil.  

The shift towards the green energy transition is firmly out of focus for Shell. It is sticking to fossil fuels with plans to add 12 million tons of LNG capacity by 2030. It also halved its target for low-carbon investments to 10% of capex by 2030. Plus, the Financial Times wrote this week that Shell and others have now abandoned a six-year attempt to define a ‘net zero’ emissions strategy. This is yet further confirmation that Shell’s focus is on boosting shareholder returns.  

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In the second quarter, Shell put an end to the BP takeover speculation by saying in June it has no intention of making an offer for its rival. Under takeover rules, the company is banned from making an approach for six months.   

Shares in Shell have outperformed rival BP this year – Shell is up around 6% year-to-date versus BP which is roughly flat. BP will deliver its second quarter results the following week on 5th August.

NEXT 

Richard Hunter, Head of Markets, interactive investor says, “Next will deliver its second quarter trading statement on Thursday 31st July. 

The retailer has an increasing reputation as a company which under-promises and then over-delivers. At its first quarter update in May, full-year pre-tax profit guidance was raised once more by the company to £1.08 billion, and it is something of an irony that the lack of a further upgrade could actually be met with some disappointment given investors’ high regard for the company.

The shares have risen by around 25% in the year to date (and by nearly 40% over the last year), with the group’s online and international offerings particular highlights. For the latter, Next had previously described some interesting prospects. The group believes that international tastes in clothing are beginning to converge, not least of which is due to the increasing visual power, appeal and presence not just of the internet, but also the rise of streaming services which are now increasingly used by younger audiences.”

BARCLAYS

Richard says, “Barclays will report its half-year results on Tuesday 29 July. 

Barclays’ financial strength and its geographical and business diversity have been key drivers of the group’s strong share price showing, which has risen by around 30% this year and by more than 50% over the last 12 months. 

The company’s exposure to investment banking will be of particular interest from the US, where banking behemoth JP Morgan recently reported net income growth of 9% due to increased fees and advisory activity, despite the expected slowdown in the M&A and IPO space.

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Also of interest will be how credit card spending (and indeed delinquencies) are faring on both sides of the pond. At its latest update in April, Barclays reported no signs of deterioration across its portfolios and promisingly the level of defaults on its cards in both the US and the UK was broadly stable.”

HSBC  

Richard says, “HSBC will announce its interim results on Wednesday 30th July. In the first quarter, HSBC reported profit before tax of $9.48 billion on revenues of $17.65 billion, both beating analysts’ expectations thanks to strength in its wealth business.  

The overhang from China and the tariff trade wars may not be central to its numbers next week from an investment viewpoint. Whereas HSBC had been moving towards becoming a business with a slavish reliance on interest rate movements and levels, the revised and increasing focus on the growth in affluent wealth, especially in Asia, is key to the new offering. The group has been investing heavily in this move, giving HSBC higher, but more diversified income streams.

Apart from the longer-term potential for the key Chinese market, the group previously identified areas such as India and Vietnam as being some of the fastest growing economies at present, while the building economic connections between Asia and the Middle East, notwithstanding any geopolitical conflicts, are also emerging opportunities for HSBC with its sprawling footprint.

The group has also had a strong run of late, with a more than 20% share price increase this year panning out to an increase of more than 40% over the last 12 months.”