Global markets are expected to experience a decline as investors await the Federal Reserve’s rate decision and Australia’s inflation figures.

The current earnings season in the S&P 500 has shown that 76% of companies have surpassed earnings expectations, while 62% have beaten revenue estimates. However, according to the blended growth rate, earnings are predicted to fall by 7.7% compared to the previous year, with the energy sector anticipated to experience the largest decline.

General Electric (GE) has rallied to a six-year high, outperforming tech stocks in 2023 with a 72.4% increase in share value. GE’s second-quarter earnings have exceeded expectations, strengthening the company’s position ahead of its planned spin-off of the Power/Renewables division from the Aerospace unit. The aerospace business is thriving, and GE Vernova, the power business, is gaining momentum.

Inflation forecast

The International Monetary Fund (IMF) has raised its global growth forecast to 3% for 2023, up from 2.8% in its April assessment, despite China’s economic recovery showing signs of slowing down. Inflation is also expected to improve, with headline inflation projected to reach 6.8% in 2023, down from 8.7% in 2022.

Consumer sentiment in the US has reached a two-year high in July, as reported by The Conference Board. The Consumer Confidence Index reached 117, up from 110.1 in June, though it fell short of Wall Street’s expectations of 112. The expectations index also rose, indicating a positive outlook, and the “jobs plentiful” index increased. However, the perceived likelihood of a recession in the next 12 months also edged up to 70.6%.