In the US, there is a rotation of funds between sectors. Quarterly earnings for the second quarter are not yet in line with forecasts

American Express’s (AXP) shares fell nearly 4% after the credit card giant missed quarterly earnings expectations and posted a weak full-year profit outlook. Consensus estimates suggest the current reporting season will be a flop. Real GDP growth is expected to deteriorate towards the end of the year.

The ECB will hold a monetary policy meeting this week. The ECB is expected to raise the rate by 0.25%. But the focus will be on the central bank’s plans for September, and markets are divided on whether there will be another hike or whether the ECB will hit the pause button. ECB President Christine Lagarde is likely to reiterate that future decisions will be based on incoming economic data. Europe’s economic outlook is deteriorating rapidly, with GDP falling in a number of key economies, business activity falling, and manufacturing declining. The only thing holding the economy together is a strong labor market.

Crude oil prices rose for the fourth week in a row. On Friday and Saturday, Russia continued to attack Ukrainian food export businesses in southern Ukraine and escalated tensions after pulling out of an UN-brokered safe sea corridor agreement to transport Ukrainian grain. Moscow has set a condition for the grain deal in the form of lifting some sanctions but is deliberately destroying Ukraine’s port infrastructure, confirming its reputation as a terrorist state.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 0.87% for the week, China’s FTSE China A50 (CHA50) fell by 0.64%, Hong Kong’s Hang Seng (HK50) ended the week down by 1.29%, and Australia’s S&P/ASX 200 (AU200) ended the week positive by 0.15%.

On Monday, Hong Kong stocks fell amid signs that foreign investors are cutting their bets on China’s biggest companies as Beijing refrains from major stimulus measures amid a deteriorating economy.

Japan’s trade balance data last week showed a trade surplus in June, which could lead to wage growth going forward if demand for Japanese goods remains strong. Wage growth tends to be accompanied by rising prices, meaning inflation will continue to rise slowly, which is crucial for the Bank of Japan before it changes its loose monetary policy. At the same time, Japan’s top financial diplomat suggested on Friday that the central bank may change its approach to monetary stimulus at its policy meeting because of “signs of change” in corporate behavior regarding wage growth and price increases.

New Zealand recorded a small trade surplus in June, mainly due to lower volumes and values of imported gasoline and diesel. Imports and exports totaled about $16.3 billion, with exports exceeding imports by only $8.8 million. These figures are better than Westpac’s forecast of a $450 million monthly deficit. However, they do not change the overall picture of an alarming annual deficit. On a seasonally adjusted basis, the country’s trade deficit for the second quarter totaled $2.3 billion.