Investors expect a 22% increase in revenue of the US companies

Dow Jones Industrial Average and S&P 500 have increased for the third consecutive week. Earnings reports of the US companies continues to please investors. So far, only nearly 90 companies from the S&P 500 list have released their earnings reports for the 2nd quarter of 2018, but financial indicators of almost all the companies have exceeded forecasts. Now investors expect a 22% increase in the aggregate profit of this index, whereas on July 1, at the beginning of the reporting season, the overall forecast was much more modest - (+ 20.7%). This week, another 180 companies from the S&P 500 list will publish their reports.

Very optimistic expectations of an increase in profit make investors attentively follow corporate indicators. It is especially important to assess the impact of mutual increase in import duties between China and the US, as well as the risks of expanding trade wars to the European Union. US President Donald Trump said in an interview on CNBC about the possibility of imposing duties on all Chinese imports, and also accused both China and the Eurozone of manipulating their currencies to the detriment of the US.

Accordingly, earnings reports of motorcycle manufacturer Harley-Davidson, which will be released on Tuesday, may become an interesting factor for investors. The business of this company strongly depends on sales in European countries. Also, the quarterly data of chips manufacturer Qualcomm, which will be released on Wednesday, may be very indicative. China accounts for two-thirds of its revenue. In theory, Trump's foreign trade initiatives should support US corporations and reporting can show whether it is so.

In addition to corporate earnings reports, important US economic data will be published this week. On Thursday, the trade balance for June, and on Friday – the GDP for the 2nd quarter will be released. In the Eurozone, the key event will be the next ECB meeting on Thursday. No rate hike is expected. The speech of the President of the European Central Bank Mario Draghi may affect the dynamics of the euro.