ECB, growth and inflation are driving the markets

With stock prices staying high and the US capital market hovering near record highs, the big question for the markets next week is whether profits will continue to rise or a liquidation will be recorded in order to capitalize profits.

In Europe, the focus is on the data that is expected to be announced on Tuesday concerning the GDP and the unemployment during the second quarter.

The European Central Bank (ECB) is also meeting on Thursday, with investors expecting some information about its tapering intentions, following in the footsteps of the Fed.

In the US, at a macroeconomic level, the August US Producer Price Index data, next week, could provide some indications of how inflation is shaping up as in July the biggest annual in more than a decade was recorded.

With the coronavirus Delta variant continuing to stunt growth, “many investors may be looking in the opposite direction and taking a more defensive stance,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky.

Morgan Stanley analysts last week downgraded US third-quarter growth estimates to 2.9% from 6.5%.