What happens in this Global Week Ahead?

• The Federal Reserve holds its first meeting with Chair Kevin Warsh in charge.
• U.S. President Trump meets other world leaders at a G7 summit in France.
• The Iran war drags on. Ditto the Ukraine War. Both get G7 air time.
• A by-election in northern England could launch a contest to oust Britain's Prime Minister.

Added to that, other central bank meetings may add drama for financial markets.

Including Japan, where its policy rates is expected to rise to 1.0% — for the first time in over three decades.

Next are Reuters’ five world market themes, re-ordered for equity traders—
 

(1) Across June 16th-17th, a New Fed Chair Joins the FOMC

Kevin Warsh chairs his first meeting as head of the U.S. Federal Reserve this week, with markets increasingly pricing in the chance that stubbornly high inflation will mean U.S. interest rates go up again in the coming months, rather than down.

Warsh & Co. aren't expected to do anything just yet, but all the market focus will be on Wednesday's policy statement and press conference for what the new boss signals — and whether there are any notable changes in his communication style, or fresh ideas on how the Fed should operate.

Officials are also releasing economic and interest rate projections at the meeting, with traders keen for insights into the extent of the divergence in views.

Data this week showed U.S. consumer inflation increased at its fastest pace in three years in May after the Iran war drove a surge in energy prices.

Still, President Donald Trump has reiterated his desire for lower interest rates.
 

(2) A G-7 Summit in France

Wars in the Middle East and Ukraine are set to dominate next week’s Group of Seven summit in France's picturesque Évian-les-Bains, especially now that Trump has suggested a peace deal with Iran could be struck in Europe over the weekend.

Having already shifted the dates to accommodate Trump's birthday plans for cage fighting on the White House lawn, French officials, like other recent summit hosts, have set the bar low, suggesting it will be a success if Trump just stays for the whole event, having left the 2025 version early.

The Middle East problems mean Saudi Arabia, the United Arab Emirates, Qatar and Egypt have all been invited, as has Ukraine's President Volodymyr Zelenskiy as Europeans push Washington to maintain support for Kyiv against Russia.

Leaders will also discuss broader issues such as economic security, global imbalances and reducing dependence on China for critical minerals, though concrete outcomes are expected to be limited.
 

(3) The Bank of Japan (BoJ) Meets

The Bank of Japan also meets next week with market watchers expecting a long-awaited 25-basis-point hike on Tuesday that would lift Japan's key interest rate to 1% for the first time since 1995.

With the move well-telegraphed, it's unlikely to materially lift the struggling yen.

The currency remains deep in intervention territory following another difficult year and analysts say a much faster pace of tightening would be needed for the yen to really benefit.

That looks a tall order given the prolonged war in the Middle East and the BOJ's ‌cautious track record.

Adding to the difficulties, Governor Kazuo Ueda will not be there, due to his hospitalization this week.

It will be first time a BOJ governor misses a scheduled policy meeting since at least 1998.

Australia's central bank will also be in debate, although it is widely expected to keep rates on hold when it meets on Tuesday having hiked three times already this year.
 

(4) A June 18th U.K. By-Election? It Could Ultimately Produce a New U.K. Leader

The coming week is a bumper one for U.K. markets.

A local election on the outskirts of Manchester, northern England, could result in a serious contender for Prime Minister Keir Starmer's job, as the Labour leader deals with near-rebellion within his own ranks and record voter dissatisfaction over his handling of the economy.

The June 18th by-election in the town of Makerfield could allow Greater Manchester Mayor and Labour candidate Andy Burnham to return to Westminster.

Many in the markets believe he would favor a more expansive fiscal policy than Starmer.

The U.K. already has very little financial wiggle room and borrowing costs are eye-wateringly high.

An auction of 10-year gilts on June 16th could provide a gauge of investor appetite for UK bonds against a fraught political backdrop.

And all this is even before the Bank of England meeting on June 18th, at which U.K. rates will likely remain unchanged, and data releases from inflation to consumer spending.
 

(5) Finally, Indonesia and Brazil Central Banks Set Monetary Policy

While all Asian energy importers have borne the brunt of the Strait of Hormuz shock, Indonesia has been particularly hard hit, meaning its central bank will be back in the spotlight ahead of Thursday's rate call.

A toxic mix of policy uncertainty, governance worries and fiscal slippage under President Prabowo Subianto — on top of an unforgiving global backdrop — has driven the rupiah to record lows and billions of dollars out of local markets.

Caught off guard by the speed and scale of the slide, Indonesian monetary policymakers responded this week with a surprise 25 basis point rise, alongside heavy FX intervention. Another hike looks more like a question of how much, not if.

Meanwhile, Brazil’s central bank is up on Wednesday, and markets still can't decide whether it will keep lowering rates or hit pause as inflation heats up.

After back-to-back 25 bps cuts in March and April that took the Brazilian Selic policy rate to 14.5%, the easing cycle is less straightforward.
 

Zacks #1 Rank (STRONG BUY) Stocks

Next are three Zacks #1 (STRONG BUY) large cap stocks, benefitting from fresh covering analyst earnings upgrades.

(1) Albemarle (ALB Quick QuoteALB - Free Report) : This is a $159 a share stock, with a market cap of $17.3B.

It is found in Zacks Diversified Chemical industry. The stock holds a Zacks Value score of D, a Zacks Growth score of C, and a Zacks Momentum score of A.

F12M P/E: 11.9.

Image Source: Zacks Investment Research

Albemarle Corp. is a premier specialty chemicals company with leading positions in attractive end markets globally.

It is a leading producer of highly-engineered specialty chemicals geared to meet customer requirements across a bevy of end markets including petroleum refining, consumer electronics, energy storage, construction and automotive.

(2) Dycom Industries (DY Quick QuoteDY - Free Report) : This is a $465 a share stock, with a market cap of $13.3B.

It is found in the Zacks Building Products-Heavy Construction industry. The stock holds a Zacks Value score of C, a Zacks Growth score of A, and a Zacks Momentum score of A.

F12M P/E: 28.6.
 

Image Source: Zacks Investment Research

Dycom Industries is a leading provider of specialty contracting services throughout the U.S.

It supplies telco providers with a comprehensive portfolio of specialty services:

• Program management, planning, engineering and design, aerial, underground, and wireless construction, maintenance, and fulfillment services for telco providers.
• Underground facility locating services for various utilities, including telco providers.
• Other construction and maintenance services for electric and gas utilities. It also supplies the labor, tools, and equipment.
• Engineering services to telco providers, including the planning and design of aerial, underground, and buried fiber optic, copper, and coaxial cable systems that extend from the telephone company hub location, or cable operator headend, to the consumer’s home or business.
• It excavates trenches in which to place these cables & places related structures.

(3) Murphy USA (MUSA Quick QuoteMUSA - Free Report) : This is a $622 a share stock, with a market cap of $11.3B.

It is found in the Zacks Retail-Convenience Store industry. The stock holds a Zacks Value score of C, a Zacks Growth score of A, and a Zacks Momentum score of D.

F12M P/E: 18.9.
 

Image Source: Zacks Investment Research

Murphy USA Inc. is a leading independent retailer of motor fuel and convenience merchandise in the United States.

Murphy USA markets refined products through a chain of retail stations, almost all of which are located near a Walmart supercenter, primarily in the Southeast, Southwest and Midwest United States.

Apart from the retail outlets, Murphy USA operates certain product distribution terminals and ethanol production plants.

The company also owns a dedicated line space on the Colonial Pipeline, the largest refined products system in the country and the biggest gasoline mover.
 

Key Global Macro

Expect no changes to central bank policy rates.

Rather, this is a week for traders to review U.S. monetary policy projections, aka “The Dot Plot.”

That is out on Wednesday.

On Tuesday, the Reserve Bank of Australia (RBA) likely keeps its policy rate at 4.35%. Also, the U.K. broad CPI (the prior was +2.8% y/y) and core CPI (the prior reading was +2.5% y/y) are out for May.

On Wednesday, the U.S. FOMC likely keeps it policy rate at 3.75%. A new set of Summary Economic Projections (aka “The Dot Plots”) comes out.

On Thursday, the U.K.’s Bank of England (BoE) likely keeps its policy rate at 3.75%.

On Friday, Canada’s retail sales come out — for April. +0.9% m/m is the prior reading.
 

Conclusion

On June 10th, Zacks Research Director Sheraz Mian shared a Q2 earnings outlook.

Four key points:

(1) Total Q2 earnings for the S&P500 index are currently expected to be up +21.8% from the same period last year, on +10.9% higher revenues.

11 of the 16 Zacks sectors are expected to enjoy positive earnings growth.

(2) Q2 earnings estimates have been steadily going up since the quarter got underway, with the current +21.8% growth rate up from +18% at the start of April.

Estimates have increased for 5 of the 16 Zacks sectors, including the Tech, Energy, Basic Materials, Utilities, and Business Services sectors.

(3) Zacks expects Q2 earnings to be above the year-earlier level for 11 of 16 sectors.

Strong growth is expected at the Energy (+114.0% earnings growth), Basic Materials (+47.1%), Tech (+43.6%), Utilities (+14.6%), Aerospace (+10.8%), and Industrial Products (+10.2%) sectors.

(4) The Tech sector has been a critical growth pillar since Q3-23. It is expected to continue playing that role in Q2-26, with earnings growth of +43.6%.

Excluding the Tech sector’s substantial contribution?

Q2 earnings growth for the rest of the S&P500 index would be +11.4% (versus +21.8% otherwise).

That’s it.

Enjoy the trading week.

John Blank, PhD.
Zacks Chief Equity Strategist and Economist