<div id="readability-page-1"><div><p><span><img src="https://imageproxy.pbkrs.com/https://assets.cmcmarkets.com/images/the-week-ahead-us-retail-sales-uk-inflation-netflix-results_hero.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="1200" height="900" original-src="https://imageproxy.pbkrs.com/https://assets.cmcmarkets.com/images/the-week-ahead-us-retail-sales-uk-inflation-netflix-results_hero.jpg"/></span></p><p>Welcome to Michael Kramer’s pick of the key market events to look out for in the week beginning Monday 18 August. </p><p>Although the second half of August tends to be one of the quieter periods of the year, there are still a few important economic events to look out for. Not least the UK’s consumer price index (CPI) reading for July. Out on Wednesday, the data may offer an indication of the path that interest rates could take in the final four months of the year. Also of note are the latest purchasing managers’ index (PMI) numbers, which serve as a comparison of the economic health of leading industrialised countries. On the earnings front, retailer Walmart is the biggest company by market cap set to report earnings in the coming week. However, we’ve picked out Palo Alto Networks for its greater potential post-earnings price swing, making it a stock to watch on Monday. </p><h2>Palo Alto Networks Q4 earnings</h2><p><b>Monday 18 August </b><br/> Analysts expect Palo Alto Networks to report that fourth-quarter earnings grew 17.2% year-on-year to $0.88 a share as revenue increased 14.3% over the same period to $2.5bn. Gross margins are forecast to have widened to about 77%. Looking ahead to Q1, analysts see earnings growth slowing to 9.2% year-on-year, with revenue growth also cooling on an annual basis to 13.9%, or $2.4bn. Gross margins are expected to expand sequentially to 77.2%. Shares of the Nasdaq-listed cybersecurity company, which have had a rocky eight-and-a-half months leaving them down 4% year-to-date at $173.55, could rise or fall 6.6% post-earnings, based on options market positioning.</p><p>Options positioning suggests that the stock may face resistance at $180 and $200, potentially making it difficult for the shares to advance following the Q4 results. The technical chart, below, supports this view. It highlights two important points. First, the stock has failed to break above $207 on multiple occasions since December. And second, the share price has gapped below an uptrend, a decline reflected in the falling relative strength index (RSI), a key measure of momentum. This setup suggests that the shares might fall back towards support around $158. There is, however, upside potential towards the $195 to $200 range if the Q4 results are much stronger than expected.</p><p><b>Palo Alto Networks share price, June 2024 - present</b><br/> [Chart]<br/><sup><i>Sources: TradingView, Michael Kramer</i></sup></p><h2>UK July CPI</h2><p><b>Wednesday 20 August</b><br/> Inflation in the UK has risen steadily over the past year. After cooling to 1.7% last September, consumer price growth was running at 3.6% in June. The latest figures may show that the pace of price growth accelerated to 4% in July. This raises questions over why the Bank of England cut interest rates by a quarter of a percentage point to 4% on 7 August. The vote was a close call, with the nine-member monetary policy committee voting 5-4 for a rate cut. This split decision perhaps explains why the market expects the BoE to hold rates steady until December, and possibly until February 2026. The twin imperatives of lowering rates to stimulate economic growth and maintaining high enough rates to tame inflation will remain a tricky balancing act for some time. </p><p>Persistent inflationary pressures and the potential for rates to remain elevated are part of the reason why GBP/USD has powered higher recently – and why it is likely to continue doing so. The pound is now trading at resistance near $1.36. Meanwhile, the RSI (the purple line in the lower panel of the below chart) has turned sharply higher and broken a downtrend, suggesting that momentum has shifted from bearish to bullish. This indicates that the pound could strengthen further against the dollar. A move above $1.36, which could be triggered by a higher-than-expected CPI reading, could propel GBP/USD towards $1.373.</p><p><b>GBP/USD, June 2024 - present</b><br/> [Chart]<br/><sup><i>Sources: TradingView, Michael Kramer</i></sup></p><h2>UK, US August PMI data</h2><p><b>Thursday 21 August </b><br/> While manufacturing and services PMI readings from the US and the UK have been mixed in recent months, there have lately been signs of improvement. The key question now is whether economic activity continued to pick up this month, and whether this fed through into the latest data. With global economic uncertainty easing and economic data remaining broadly stable, the investment case for safe-haven assets like gold has weakened. This is one reason why the metal has been unable to break out of its trading range for several months.</p><p>Gold appears to be forming a distribution pattern, which could be part of a topping process. Spot gold prices have failed to break through resistance at $3,430 an ounce on four separate occasions this year – hardly a bullish sign. More recently a downtrend has formed, confirmation of which could come if gold were to fall below the previous low of $3,270. Additionally, the RSI is trending lower, with no sign of an imminent reversal. Stronger economic data may continue to reduce the perceived need for the safety hedge that gold provides.</p><p><b>Gold CFDs, June 2024 - present </b><br/> [Chart]<br/><sup><i>Sources: TradingView, Michael Kramer</i></sup></p><p>Major upcoming economic announcements and scheduled US and UK company reports include:</p><h2>Monday 18 August</h2><div><p>• Germany: Monthly Bundesbank report<br/> • Switzerland: Q2 industrial production</p><p> • Results: Palo Alto Networks (Q4)</p></div><h2>Tuesday 19 August</h2><div><p>• Australia: August Westpac consumer confidence <br/> • Canada: July consumer price index (CPI)<br/> • Japan: July exports, imports and trade balance </p><p> • Results: Home Depot (Q2), International Workplace (HY), Medtronic (Q1)</p></div><h2>Wednesday 20 August</h2><div><p>• Australia: August flash purchasing managers’ index (PMI) data<br/> • China: People’s Bank of China interest rate decision<br/> • Eurozone: July harmonised CPI<br/> • Germany: July producer price index (PPI)<br/> • New Zealand: Reserve Bank of New Zealand interest rate decision<br/> • UK: July CPI, July PPI<br/> • US: Federal Reserve meeting minutes</p><p> • Results: Analog Devices (Q3), Baidu (Q2), Estee Lauder (Q4), Ithaca Energy (HY), Lion Finance (HY), Lowe's Companies (Q2), OSB (HY), Target (Q2), TJX Companies (Q2)</p></div><h2>Thursday 21 August </h2><div><p>• Australia: August consumer inflation expectations<br/> • Eurozone, France Germany, UK, US: August flash PMI data<br/> • Japan: July CPI<br/> • US: Jackson Hole economic symposium, weekly initial jobless claims</p><p> • Results: Hays (FY), Intuit (Q4), Ross Stores (Q2), Walmart (Q2), Workday (Q2), Zoom (Q2)</p></div><h2>Friday 22 August </h2><div><p>• Germany: Q2 gross domestic product (GDP)<br/> • Canada: June retail sales<br/> • UK: July retail sales <br/> • US: Jackson Hole economic symposium</p><p> • Results: BJ’s Wholesale Club (Q2)</p></div><p><i>Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.</i></p></div></div>

PANW

<p>The week starting August 18 will feature key market events, including Palo Alto Networks' Q4 earnings report, expected to show a 17.2% year-on-year growth in earnings to $0.88 per share. UK inflation data is anticipated to rise to 4% in July, raising questions about the Bank of England's recent rate cut. Additionally, PMI data from the UK and US will be released, with expectations of continued economic improvement. The GBP/USD exchange rate may strengthen further if CPI readings exceed expectations.</p>

- The week starting August 18 features key economic events, including the UK’s July consumer price index (CPI) and earnings reports from major companies like Palo Alto Networks and Walmart.  
- Analysts expect Palo Alto Networks to report a 17.2% year-on-year earnings growth, while the UK CPI may show inflation rising to 4%, influencing the Bank of England's interest rate decisions.  
- Additionally, mixed PMI readings from the US and UK will be monitored for signs of economic improvement, impacting market sentiment and safe-haven assets like gold.

The Week Ahead: Palo Alto Networks earnings, UK inflation, global PMI data