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Commentary

The Week Ahead: Will We See a Cut in Interest Rates?

We're watching interest rates, energy companies, and the start of earnings season.

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As July gets underway and we head into the third quarter of 2019, the focus will be on the Federal Reserve and European Central Bank, which changed its appetite on interest rates and stated it stands ready to cut rates to counter slowing economic growth, as it meets later in the month.

For stocks, the renewed promise of lower interest rates reversed losses caused by a new round of tariffs on Chinese goods and increased anxiety surrounding U.S. and Mexico relations. 

A late-quarter bounce in oil prices led the Morningstar equity research team to believe the group offers buying opportunities. “Energy continues to rank as the most compelling sector from a valuation perspective, with oil prices roughly where they began,” says Dan Rohr, director of North American equity research.

Moving forward, earnings kick off this week, led by  PepsiCo (PEP), which has a Morningstar Rating of 3 stars, and newly public Levi Strauss (LEVI) on Tuesday. That's followed by  Bed Bath & Beyond (BBBY) on Wednesday, another 3-star stock.

 

 

Gabrielle Dibenedetto does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.