Hello friends and Fortune readers.
We’re coming off of a short week and a long weekend, but there’s still plenty on tap for the upcoming week, including the reverberations from Greece’s rejection of austerity measures demanded in return for bailout money, and a closer look at what was discussed at the Fed’s most recent policy meeting. While the Fed minutes could offer clarity with respect to the U.S. central bank’s plans for an eventual interest rate hike, the Bank of England will also be making a statement regarding U.K. rates. Meanwhile, Pepsico and a handful of other companies will report quarterly financial figures, and champions will be crowned at the premier tennis competition.
Here’s what else you need to know to start your week.
1. Greece fallout
European stock and bond markets are set to take a sharp hit on Monday morning after Greece voted ‘No’ to harsh bailout conditions from the troubled country’s euro zone creditors in a national referendum Sunday. Many economists, including those at U.S. banking giant JPMorgan, reckon the outcome of Sunday’s referendum will probably hasten Greece’s exit from the euro.
“Although the situation is fluid, at this point Greek exit from the euro appears more likely than not,” JPMorgan’s Malcolm Barr told clients on Sunday evening, adding ‘Grexit’ was now the bank’s “base case.”
“‘No’ most likely means EMU exit,” Barclays told its clients.
While currency weakness in itself won’t damage the euro zone economy, the reaction of other southern euro zone government bond markets and the stock markets first thing Monday will be a better measure of the sort of shock that has been largely missing in markets through the weeks and months of the latest standoff. As recently as Friday, many investors had assumed a ‘yes’ vote would win out in the end.
2. Fed minutes
The Federal Reserve will release the minutes from its latest policy meeting on Wednesday. The minutes will be closely scrutinized by investors looking for further clues as to when the U.S. central bank might be more inclined to institute its planned interest rate hike. Some analysts expect the Fed to wait until the end of this year to raise rates, while others think that steady economic growth could force the Fed’s hand as soon as September.
3. U.K. interest rates
Speaking of interest rates, the Bank of England will make its own announcement on Thursday regarding the U.K.’s record low interest rates. While the country’s central bank recently indicated that rates would likely remain “glued” to the floor for the time being, economists think the Bank of England could raise interest rates as soon as the first quarter of 2016, assuming wage growth meets or exceeds forecasts.
4. Pepsico earnings
Pepsico (PEP) is expected to report second-quarter earnings on Thursday that outpace Wall Street’s expectations for profits and revenue. However, Pepsi did cut its full-year earnings and sales forecast earlier this year, citing the negative effects of the strong U.S. dollar.
Also reporting earnings on Thursday is Walgreens Boots Alliance (WBA), as the pharmacy/convenience store chain owner will post third-quarter results. Other companies reporting earnings this week include The Container Store (TCS), on Tuesday, and Alcoa (AA), on Wednesday.
5. Wimbledon Finals
The world’s most prestigious tennis tournament wraps up this weekend, with the women’s singles champion set to be crowned Saturday afternoon and the men’s champion following the next day. The tournament previously announced a decision to increase the size of the prize money pool for this year’s competitors to more than $40 million.
—Reuters contributed to this report.
