Fed raises interest rates

The Federal Reserve Bank in the USA has decided to raise interest rates once again by 0.25%. This takes it to the highest level in 22 years. At the last meeting in June, they decided to pause interest rate hikes as inflation was moving in the right direction. Whilst inflation is still showing signs of falling, it seems that further interest rate hikes are still needed.The markets fell marginally on the back of the news. The European Central Bank is due to announce their interest rate decision today which many similarly expect to be a raise. 

A weaker European banking sector

The European banks BNP Paribas and Barclays both continued the earnings announcements this week, but showed weaker signs when compared to their US counterparts. Whilst climbing interest rates is helping the retail sectors of both of these banks, as well as others also announcing this week, their investment banking arms are being hit by a lull in deals. The shares in both BNP Paribas and Barclays fell on their earnings announcements. 

Food sector to release earnings

The week of wild earnings announcements continues with McDonald’s, Diageo, Anheuser-InBev, Hersheys and Mondelez all releasing their figures today. This usually includes their profits, forecasts, and any relevant debts. Food prices are notoriously volatile, which might suggest that their earnings could be lower. However, generally in tougher economic periods, food and restaurants tend to struggle through, as consumers treat themselves to the affordable treats, from which the sector benefits. Fingers crossed for today!

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Sources: Financial Times, Nasdaq, Yahoo Finance, IG, AJ Bell,