The market has been excited by a rate cut for almost two months.
This rally could continue after the decision of the Fed. Lower interest rates reduce corporate borrowing, which has a positive impact on the bottom line and the stock market. Expectations for a quarter-percentage point rate cut were just under 80% on Friday, while the remaining odd 20% forecast a cut of half a point.
But does the US economy need the upswing?
Current economic growth The cycle is a decade old and could last even longer with a looser monetary policy by the Fed. The US economy is not about to collapse, regardless of whether and how much the Fed lowers interest rates. However, in the first half of 2019, the manufacturing sector showed some weakness and business investment was dampened as companies worried about developments on the trade front. In addition, inflationary pressures have remained low.
However, American consumers continued to spend. Consumer sentiment remains solid, as confirmed by Friday's GDP report for the second quarter.
With a rate cut ̵
1; the first since 2008 – fully priced in, the market's attention is drawn to the next developments. With few economic data available to assess the economic situation between the Fed meetings in July and September, the central bank could hold back another rate cut by the end of the year. The market is forecasting another cut before the end of 2019.
Expectations for rate cuts in September, October and December are 100%, according to the CME FedWatch tool.
Another way in which the US economy could gain a boost: the end of the trade war.
"Controlling tariffs will mean a further reduction in market share," said JJ Kinahan, chief strategist at TD Ameritrade
Although the United States and China have agreed a tariff, the trade dispute remains unresolved. This burdens business confidence and the amount of business investment.
2. Apple Profit: Apple will report its quarterly earnings on Tuesday, hoping to prove to investors that it can go beyond its China problems.
Apple ( AAPL ) warned investors in January that iPhone sales had been adversely affected by the slowdown in the Chinese economy and a continuing trade war. However, CEO Tim Cook announced in the final quarter that the worst may be over as Apple sees signs of improvement in the Chinese market. Cook said he was encouraged by the improved trade dialogue between China and the United States and the positive reaction of customers to falling prices in Asia.
Wall Street analysts disagree as to whether Apple can turn its iPhone assets. Jun Zhang, China analyst at Rosenblatt Securities, downgraded Apple earlier this month, predicting that the iPhone XS will be "one of the worst-selling iPhone models in Apple's history."
Despite Cook's optimism, the Trump government could see an increase in tariffs on Apple products in the near future. President Trump tweeted on Friday that he would refuse to liberate Apple from paying parts for the new Mac Pro, which Apple is reported to be producing in China, as its government continues the new round of import duties on Chinese goods. Apple manufactures the latest version of the Mac Pro in Texas.
3. GE Profit: General Electric's declining electricity business continues to weigh on the company's profits and GE is burning money. But investors know that by now. They hope GE continues to make progress in its turnaround.
Despite the collapse in earnings, GE [ GE ) has met the forecast for free cash flow in the industry for 2019 throughout the year. But GE is exposed to a new threat: Boeing ( BA ) 737 Max Crisis.
Boeing said last week it is getting ready for a 737 Max production shutdown and will not be given permission to re-fly the grounded aircraft this year. That would be a setback for GE, which builds jet engines for the 737 Max.
GE will record a profit on Wednesday.
4th Job Report: The US Bureau of Labor Statistics will publish its job report for July on Friday.
Economists predict that the US economy created 160,000 new jobs in July and that the unemployment rate dropped to 3.6%.
The US economy created 224,000 new jobs in June, a strong comeback to the labor market after a disappointing May.  . 5 Coming this week:
Monday – Beyond Meat ( BYND ) Announces Findings
Tuesday – Apple, Sprint ( S ) Mondelez [ MDLZ ) Under Armor [ UA ) and Procter & Gamble ( PG ) Report earnings.
Wednesday – Fed rate decision; GE, Occidental Petroleum ( OXY ) Molson Coors ( TAP ) and Qualcomm  ( QCOM ) Results Report
Thursday – General Motors ( GM ) Dunkin & # 39; ( DNKN ) Kraft Heinz ( KHC ) and Verizon ( VZ ) [ReportItem
Friday – Exxon [ XOM ) Chevron (19459010] CVX]) and Berkshire Hathaway  [ BRKA ) Report earnings