Week Ahead to July 29. The 5 elements investors need to watch + potential trading ideas

Hey there,

There are five key things happening right now in the world, all of which have ramifications for investors and traders.

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1. In the US, the central bank, the Federal Reserve meets this week and is expected to rise interest rates by 0.25%. While the Fed's preferred inflation gauge, known as PCE is released the day after the Fed's decision. Inflation is expected to show it has continued to fall.

3. Last week China said it will act to support its country's economic growth. The world holds its breath for an announcement of what stimulus will include. This could trigger a rally in equities; that are linked to the Chinese consumer, to EV makers, to luxury brands, to commodity companies that export to China.

4. Oil supply is likely to decline from the start of August next week, as Russia said it will begin to reduce its oil exports by 500,000 barrels per day. This is at a time when demand is rising. Plus, China has pledged to reinvigorate its economic growth. This is on top of OPEC saying there is a fundamental lack of oil supply. And yet the world is four months away from peak oil demand season (December/January).

5. El Nino is being blamed for causing record hot temperatures in Europe and fires. Food prices have started to react. The Bureau of Meteorology said crops are at risk. El Nino could impact 70% of crop output. This will also likely cause food prices to rise, along with energy demands. You might also expect El Nino to put insurance companies on notice too. As mentioned below, food prices have already started to rise, so it's worth considering the ripple effects.

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1. As mentioned above, consider watching oil prices, which are experiencing profit taking ahead of oil supply reducing next month. Consider, the strength of the US dollar also weights on oil, as a strong greenback makes crude more expensive for investors holding other currencies.That said, if you believe the Fed will stop rising interest rates after this week, that may also support oil being bought, on top of the other considerations mentioned above.

2. Amid rising climate risk, food prices are already rising. Expect ripple effects.

- Wheat and Corn prices, for example have risen to their highest levels in a month. If you were a technical analyst, you might recognize that the charts for Wheat and Corn suggest their prices are rallying and could continue to rally and enter an uptrend. As a fundamental investor, you might also assume that prices are going to rise and face upward pressures.

3. Given China may introduce new economic stimulus, keep an eye on

- Commodity companies, including copper, lithium, coal.

- Plus, keep an eye on companies in the EV industrial chain.

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Have a great week.

Jessica