American stock markets broke records again last week. It seems to be positive right now, especially in the early market. Why? Because Trump said they've reached an agreement with the European Union on tariffs. This is, of course, very important. Meanwhile, negotiations with China are resuming. There are reports that the tariffs will be postponed for about three months. The market seems to be receptive to this. However, there's a lot of news this week, both on the balance sheet and the macroeconomic front. How could all this affect the stock market? Will the long-awaited correction come this week? I'll comment on all of this for you.
Things aren't going too badly on the crypto side either. It looks like Ethereum will start pushing 4000 this week. It's currently broken 3900. I started buying my first XRP last week, and incredibly significant balance sheets are pouring in this week. Balance sheets from major companies like Microsoft, both in my portfolio and those not in my portfolio, which will impact the entire market, are also coming in. These will give us a serious idea of the stock market's direction.
What am I waiting for? Let's get into the details. First, let's look at the balance sheet flow. That's what I'm more interested in. Because ultimately, if your company produces good balance sheets, it continues to perform better even if there are macroeconomic disruptions in the market. Sofi, which is in my portfolio, has its balance sheet coming in before the market opens on Tuesday. This is a very important balance sheet. Not just for my portfolio, but also for where the American economy is heading. Because Sofi is a financial institution, what it says about the markets is important. PayPal used to be with me, and now it's gone. Spotify's balance sheets are also coming out before the market opens on Tuesday.
The pharmaceutical sector, or rather the entire healthcare sector in the US, has been heavily battered lately. Merck's balance sheet will provide some guidance. As for what's happening there. After Tuesday's close, there's Starbucks, but more importantly, there's Visa. Visa is one of the stocks that has been a bit beaten down recently. Those who say there's no place for Visa, especially in the world of stablecoins and new payment systems, have sold off a lot of Visa. We'll see what they have to say. But the real doomsday is Wednesday.
Incredible earnings are coming on Wednesday. Looking ahead to the aftermath, Microsoft, Meta, and Robin Hood are coming. I have Robin Hood and Meta in my portfolio. Microsoft's earnings are, of course, a very important one. I think it will impact the entire market. I'm expecting a good earnings report. I don't have any investments in Microsoft, but I predict they'll announce more compelling AI projects than Google. I'm not talking about the technology side of things. I'm talking about monetization. We'll see. As you know, Google had a good earnings report last week. A very good earnings report, but the stock didn't move much. ARM's earnings report is coming again. When I looked at Arm's technical data this morning, it looked very tight. Interesting. Lam Research is coming. What will happen in the AI world again? Carvana, one of America's most speculative stocks, is coming. This is a stock that's rising very quickly. A very speculative stock. So, things are going to be bloody on Wednesday.
We're heading into Thursday. Mastercard is coming, Roblox is coming. These are the important stocks. Ferrari is coming. If you're curious, it's not a stock I'm particularly interested in, but Apple is coming after the close, Coinbase is coming. Coinbase is in my portfolio, Amazon is coming, it's in my portfolio. Micro Strategy is coming. It's in my portfolio. That day is another exciting day. Rocket is coming. So, we'll have another very exciting day after the close on Thursday. Things calm down a bit on Friday.
There's also a strange flow of macroeconomic data. Of course, most importantly, the Fed will announce its new interest rate decision on Wednesday. The market isn't expecting a rate cut. I doubt there will be any surprises. Powell doesn't like surprises, but I hope he uses softer language and delivers concrete messages about the September rate cut. If he doesn't do that, if he gets into trouble, you know, they clashed with Trump again last week. They even have a very funny video together. Trump is pretty harsh on Powell. Powell tells Trump, "That's not how it works, man." Anyway, I don't know what he'll do.
There probably won't be a rate cut on Wednesday, but we'd like to hear a slightly more positive tone and hope to receive confirmation of two interest rate cuts by the end of the year. I also think the economic projections are coming this month. We'll see what Fed members think about those economic projections. This is important. Employment data is coming on Friday. Is there a loss of employment in the US? I don't see much of a problem. Retail sales are back. They've been quite good.
Good retail sales indicate that citizens have jobs and aren't afraid of unemployment. I'm not particularly worried, but there's still important employment data coming. Non-farm payrolls are coming on Friday. The manufacturing PMI is also coming on Friday. As you know, it's been below 50 for a long time. In other words, it's in contractionary territory. We'll see if there's a change. Frankly, I don't expect much. However, I think the manufacturing side will pick up in the second half of the year. We're eagerly awaiting that. The second-quarter gross domestic product (GDP) is coming on Wednesday. I think it will be positive. As you know, there was a contraction in the US in the first quarter. This time, I predict a rise of around 2.3%-2.4%.
This is because imports were very high in the first quarter. Companies wanted to stockpile as much product as possible without being affected by tariffs. Imports are declining in gross domestic product calculations. Now, the opposite is true. Since tariffs are in effect, there's a decrease in imports. This is also a factor that boosts the economy. So, I think this will be positive. ADP employment is coming. This is data showing private sector employment. Last month was surprisingly bad. I expected it to be positive, but it came back negative. We'll see what it does this month. It might come back negative, but there's always a difference between it and the government's nonfarm payroll data released on Friday. We'll keep an eye on that too.
The Jolts data is coming out again on Tuesday. It's the US job openings data. I think it will be good. I don't expect a significant decline. Case-Shiller is coming up. Case-Shiller is important, especially how are things going on the rent side? As you know, inflation is the main component, and we'll see that together. I'm still waiting for the main trend that rents are continuing to decline. It's such an incredibly busy week. Challenger Employment is coming up again on Thursday. So, we'll get new data on layoffs. What's the financial situation of citizens? What's the personal income situation? I'm expecting that to be good. If it weren't good, retail sales wouldn't have increased last month.
Such an incredibly busy flow. So, let's summarize. Balance sheets are important. Among the financial statements coming this week, I'm particularly interested in Microsoft and Amazon's. They will show us the impact of Amazon tariffs on American commerce. The Microsoft financial statement is a crucial piece of information for the artificial intelligence game. How are things progressing in AI? Are Capex investments continuing? We'll see. We're eagerly awaiting both. I don't think Powell will surprise us. He won't cut interest rates, but I believe he will speak positively about the future. If he speaks negatively, the stock market could fall sharply that day.
I also don't think we'll face any major problems with employment data. On the other hand, since the good news about tariffs continues to flow, if Powell doesn't surprise us this week and we don't concede a major blow to employment, I think we'll continue to rise. We'll enter August strong. August was a bad month, when we look back. So, I don't want to make any predictions about August right now. Let the data flows come. Frankly, the stock markets are a bit overheated. So, we can't say they're cheap.
Currently, the S&P 500's price-earnings ratio is 24.2x. This is a reality based on the price-earnings average of the last 12 months. Of course, this isn't cheap. On the other hand, for example, the level reached during the 2020-2021 bubble was around 30x. So, it seems like there's a long way to go from 24x to 30x. Furthermore, remember that interest rates were zero when this 30x occurred. Currently, interest rates are still very high. In other words, if these interest rates are lowered along with decreasing inflation without pushing America into a recession, it seems we have a long way to go. Of course, this doesn't mean there won't be a correction, but we're not yet in an abnormal bubble. But the bubble is slowly inflating. This is true.
On the other hand, the stock market is breathing heavily. 75% of US stocks are above their 50-day moving averages. This indicates a widespread market rally. This aspect indicates the market is quite strong, and corporate balance sheets are performing well. The S&P 500's projected earnings per share for 2026 has now reached $300, on average. This is crucial. Currently, it's between 280 and 290, and it's expected to reach 300 in 2026. If we maintain the current price-earnings ratio of 23 to 24, the index appears poised to reach somewhere between 6,900 and 7,000 in 2026. Of course, you never know. On the other hand, if price-earnings ratios of 30 are reached again, I believe the S&P 500 will easily achieve my target of 7,500.
My opportunity window is between one and five years. I usually start buying if I see the asset's price below my target. I don't buy everything at once. For example, let's say I have a price target of between $7 and $10 for XRP. In this case, I say it's currently $3.50. So, whether it drops to 3, 5, 4, or 2 from here, it doesn't matter. I need to accumulate this over the coming months. Is the current price the best? No, I have no idea. I don't even look at that. I say I'll start buying. Because if my target is 2-3 times its current price, the pullbacks in between will give me an advantage.
For example, I started buying Ethereum 2-3 weeks ago. It skyrocketed from 2600 to 3800. Am I very happy with that? I'm not. Because it couldn't be obtained at a low enough price. Of course, it's funny when it goes up after I say it. But the main issue was that it went too fast before I could expand my position sufficiently. I don't want it. I want it to stay a little low anyway. The second is always this kind of bottom-finding, selling at the peak. There are these weird, ego-driven, masculine posts on social media. You shouldn't pursue this. It's very difficult. Those who do this get one, but two don't. Have you seen anyone who does this who has become a millionaire and is now walking around rich? How many of them have achieved financial freedom and are living a peaceful life?
On the other hand, we live our lives. We also need to be at peace. This is nonsense, a thousandfold. But do you know what the key is? To be a long-term investor in good assets. It's not about holding on forever; it's about selling if your story about the asset deteriorates. For example, I've been selling some of the stocks in my portfolio lately. Because I think the story has deteriorated, or I see new places with better stories. Because the important thing is where are we taking our large total? We won't be right on every stock or cryptocurrency that day.
I constantly bought and sold these phenomena here and there. There are many different variations of this. It's in crypto, it's in options, it's everywhere. So why am I losing money? So, unless you're a full-time investor, your technical and fundamental knowledge are super strong, and you're not sitting in front of a screen 24/7, don't get caught up in all this noise. If you think an asset will go up, buy it for one to five years. If you think it probably won't go up for one to five years, sell it. It's that simple, really.
The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.
