What happens in this Global Week Ahead?

No time for a break.

Even in the middle of August, there is plenty of market news to watch:

• There's possibly more U.S.-Japanese intervention to support the yen
• Key economic data, and
• Whether the U.S. will accept an emerging interim deal being negotiated by Iran and Oman that would give Tehran control of the Strait of Hormuz

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

(1) The U.S. Treasury Intervened in the Japanese Yen Markets. What’s Next Here?

A currency languishing at four-decade lows — making fuel imports more expensive during an energy shock — is a nightmare for any policymaker. Right now, that policymaker is in Japan.

Cue Scott Bessent and a well-timed photograph of the U.S. Treasury Secretary's "to-do" list mentioning purchases of yen. Coupled with a rare joint U.S.-Japanese intervention to stem yen weakness, it may have eased Tokyo's concerns.

Job done? Not quite.

FX traders still have plenty of unanswered questions.

First, will policymakers signal that Japan's central bank is preparing a September rate hike to reinforce the yen's rebound? Then there is the bigger question over the use of euros rather than dollars in the U.S. intervention.

Some analysts say that suggests the U.S. Treasury does not want bond market strains worsened by foreign central banks selling Treasuries to fund currency-support operations.

The debate over the resilience of the dollar's reserve-currency status is far from over.
 

(2) On Wednesday, the U.S. Consumer Price Inflation Data for July Lands

U.S. inflation data on Wednesday could add to growing pressure on the Federal Reserve to raise interest rates.

Economists polled by Reuters expect the July Consumer Price Index (CPI) ‌to rise +3.4% year on year. Core CPI, which excludes volatile food and energy prices, is forecast to increase 2.5% annually.

Producer Price Index (PPI) data due a day later will provide a fuller picture of inflation. CPI and PPI figures in the previous month were softer than expected, but inflation remains above the Fed's 2% target.

Retail Sales data on August 14 cap a busy week for economic releases.

The Fed held rates steady last month, but three policymakers dissented in favor of a hike. Markets are pricing in roughly even odds of a hike at the Fed's next meeting in September.
 

(3) Will There Ever Be “A Deal” Ensuring Safe Passage of the Strait of Hormuz?

Investors are clutching at yet another deal to end the Gulf conflict and ensure safe passage through the Strait of Hormuz.

This time, the talks involve Iran and Oman, with no U.S. involvement, or sign-off, so far.

But with the conflict entering its 24th week, expectations that any agreement will hold remain modest. Yemen's Iran-backed Houthi militias have attacked Saudi Arabia and targeted tankers in the Red Sea, another key route for Gulf oil exports.

With less than five months until midterm elections, the U.S. president wants a deal. Gas prices remain stubbornly above $4 a gallon and, while inflation is not as bad as feared, it's a problem with voters.

For now, optimism about earnings growth and the potential for AI-driven productivity gains may calm investors and encourage acceptance of a near-term fudge for the strait.
 

(4) Will There Be a “Burnham Bounce” for the U.K. Economy?

New Prime Minister Andy Burnham will be hoping for good news when Britain publishes GDP data on Thursday for both the second quarter and June.

The monthly figures could see a bounce. June retail sales were unexpectedly strong, helped by spending linked to the soccer World Cup and hot weather.

Lower energy prices that month during the short-lived U.S.-Iran deal could also have helped.

However, the quarterly figure could be less encouraging, as strong growth in the first three months of the year fizzled out in April and May.

Still, Burnham, who took power in July, will be hoping for a surprise similar to that seen in the euro zone. Preliminary data showed the bloc expanded faster than expected in the second quarter. An updated Eurozone estimate is also due Thursday.
 

(5) Is the Reserve Bank of Australia’s (RBA) Policy Rate Tightening Cycle Over?

Things are different down under.

The Reserve Bank of Australia is expected to leave rates unchanged on Tuesday as policymakers assess whether the three hikes delivered this year have done enough to tame inflation.

Recent data showed consumer prices rose at a slower pace in the June quarter, a day after RBA Governor Michele Bullock said the central bank stood ready to raise rates again if needed.

Analysts suspect the RBA to maintain a hawkish stance.

Also in the tightening camp, Norges Bank meets on Thursday but is similarly expected to keep rates on hold, after Norway's core inflation slowed in June.
 

Zacks #1 Rank (STRONG BUY) Stocks

Next are three fresh Zacks #1 (STRONG BUY) large-cap stocks. The first two are major U.S. corporations. The final one is a major Mainland China corporation.

(1) Illumina (ILMN Quick QuoteILMN - Free Report) : This is a $194 a share stock, with a market cap of $30.1B

It is found in the Zacks Medical-Biomedical and Genetics industry. The stock holds a Zacks Value score of C, a Zacks Growth score of C, and a Zacks Momentum score of A.

F12M P/E: 37.4.
 

Image Source: Zacks Investment Research

Illumina is a life sciences company, which provides tools and integrated systems for analysis of genetic variation and function.

Using its proprietary technologies, the company provides innovative sequencing and array-based solutions for genotyping, copy number variation analysis, methylation studies, and gene expression profiling of DNA and RNA.

Its customers include leading genomic research centers, academic institutions, government laboratories, hospitals and reference laboratories as well as pharmaceutical, biotechnology, agrigenomics, commercial molecular diagnostic and consumer genomics companies.

Illumina generates revenue from two segments: Product and Service.

Product are primarily attributed to the partnerships and collaborations to develop distributable clinical in-vitro diagnostics for Illumina sequencers.

Service includes genotyping and sequencing services as well as instrument maintenance contracts.

(2) Qnity Electronics (Q Quick QuoteQ - Free Report) : This is a $133 a share stock, with a market cap of $28.3B 

It is found in Zacks Electronic-Semiconductor 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: 32.0.
 

Image Source: Zacks Investment Research

Qnity Electronics is a premier tech solution provider across the semi value chain.

Qnity Electronics is based in Wilmington, Delaware.

(3) nVent Electric (NVT Quick QuoteNVT - Free Report) : This is a $163 a share stock, with a market cap of $26.2B

It is found in the Zacks Electronics-Misc. Components industry. The stock holds a Zacks Value score of D, a Zacks Growth score of B, and a Zacks Momentum score of B.

Image Source: Zacks Investment Research

nVent Electric plc provider of electrical connection and protection solutions which design, manufacture, market, install and service that connect and protect equipment, buildings and critical processes.

The company's operating segments consists of Enclosures, Thermal Management and Electrical & Fastening Solutions.

nVent Electric plc is based in London, the United Kingdom.
 

Key Global Macro

On Monday, the Reserve Bank of Australia (RBA) looks to keep its 4.35% policy rate.

On Tuesday, the U.S. ADP employment change, 4-wk average, looks tepid at +15K.

On Wednesday, the July U.S. CPI should be +3.4% y/y. The core CPI should be +2.5% y/y.

On Thursday, the U.S. PPI for July comes out. The prior June reading was ‘hot’ at +5.5% y/y.

On Friday, U.S. retail sales come out. The prior June nominal reading was +6.7% y/y.

The U. of Michigan consumer sentiment index comes out. I see a 55.4 prior print.
 

Conclusion

On August 5th, Zacks Research Director Sheraz Mian shared a Q2 EPS update.

Key points:

(1) For the 386 S&P500 companies that have reported Q2 results, or 77.2% of the index’s total membership, total earnings are up +41.7% from the same period last year, on +14.8% higher revenues.

83.7% beat EPS estimates and 77.2% beat revenue estimates.

(2) This is a notably better showing from these 386 index members relative to other recent periods, both in terms of the earnings and revenue growth rates as well in terms of the beats percentages.

The EPS and revenue beats percentages for these companies are notably tracking above the averages for this group of companies over the preceding 20 quarters.

(3) The Q2 earnings and revenue growth rates have been boosted by Micron’s (MU Quick QuoteMU - Free Report) blockbuster quarterly results and Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) unrealized gain on its SpaceX (SPCX Quick QuoteSPCX - Free Report) stake.

However, the earnings and revenue growth rates would still compare favorably with other recent periods when we exclude Micron and Alphabet from these results.

Excluding Micron and Alphabet?

Q2 earnings for the remaining 384 index members that have reported Q2 results would be up +19.6% (vs. +41.7% otherwise) on +13.6% higher revenues (vs. +14.8% otherwise).

(4) The Tech sector has been a critical growth pillar since 2023 Q3 and is expected to continue playing that role in 2026 Q2, with expected earnings growth of +93.6%.

Excluding the Tech sector’s substantial contribution?

Q2 earnings growth for the rest of the S&P 500 index would be +17.7% (vs. +42.2% otherwise).

(5) Nvidia (NVDA Quick QuoteNVDA - Free Report) , Micron and Alphabet are material contributors to the Tech sector’s growth profile in 2026 Q2 and the coming quarters.

Excluding the contribution from these three Tech players?

Q2 earnings growth for the rest of the Zacks Tech sector drops to +31.4% (from +93.6%).

That’s it from me.

Warm Regards,

John Blank, PhD.
Zacks Chief Equity Strategist and Economist