Expect inflation to be a talking point yet again this week, but the corporate sector is also brimming with news following the withdrawal of Elon Musk Twitter bid, and the big banks opening the latest earnings season in the US.

Economic Calendar and News

There will be no bigger talking point than this week consumer price index out of the United States, which will provide some indication on whether inflation is showing any signs of being tamed after a series of aggressive rate hikes to date.

However, if economists forecasts are correct, inflation is tipped to reach a year-on-year reading of 8.8%. A reading that high would also represent a four-decade peak, suggesting further pain for consumers in the US, and at the same time, increasing the odds of another 75 basis point hike later this month. 

That follows last week jobs report in the US, where strong employment data also gave way to a tighter path for monetary policy. The US economy added around 370,000 jobs in June, which was around 100,000 more jobs than pundits had forecast.

Meanwhile, retreating oil prices provide some cause for optimism that inflation could be peaking.  

Staying overseas, look out for crucial second-quarter GDP data from China on Friday. Consensus figures suggest the world second largest economy contracted 2.1% in the June quarter versus the opening three months of the year, which would be the result of crippling COVID lockdowns. It would also have a prolific impact on annual GDP growth, which is pencilled in at an estimated 1.7%.

Financial markets will be looking at the GDP numbers closely to get a better gauge on whether the Chinese government intends to ramp up its support for the economy after lifting lockdowns in June, which has spurred consumer activity and manufacturing operations.

Thursday sees the release of Australian labour force statistics, with an estimated 35,000 jobs added to the local economy last month, potentially enough to see the unemployment rate ease to a near 50-year low of 3.8%. That will ultimately depend on the workforce participation rate, which is tipped to drop to 66.5%.

Stocks on watch

If there is one story that was the talk of the corporate world over the weekend, it was the news late on Friday US-time that Elon Musk is walking away from his takeover bid of social media platform Twitter (NYSE: TWTR).

The world richest man, who lobbed a US$44 billion bid at Twitter, alleges multiple breaches of the takeover agreement by Twitter, which largely centres on information around the number of bot' accounts across the platform. Musk claims that Twitter has failed or refused to provide the relevant information, with the issue proving a sticking point during an earlier period where the billionaire said the deal was temporarily on hold.

At the same time, some observers have cited the material decline in equity prices since Musk made a play for the social media platform, raising doubts as to whether he offered too much in the first place. Since that time, the share price of Tesla (NASDAQ: TSLA), which effectively served as a source of leverage for the deal, has also come off the boil.  

The two parties are now looking at the prospect of locking horns in court, with Twitter Board rejecting the allegations, and also stating that it intends to force Musk to comply with the original deal. While the original agreement included a US$1 billion termination fee, some legal observers believe the company is in a position to force Musk to complete the deal.

Sticking with legal battles, iron ore major BHP (ASX: BHP) lost its appeal against a case relating to the Samarco dam disaster that occurred in 2015. The miner was looking to block a group lawsuit valued at up to US$6 billion by as many as 200,000 Brazilians impacted by the disaster. Following the judgement, claimants will now be able to proceed with their case in English courts, although BHP has reserved its right to appeal to the UK Supreme Court.

A busy week for the stock market also sees US earnings season kick off. As always, the major banks will start proceedings, and it comes at a time where the macroeconomic outlook has grown more cloudy as inflation and interest rate hikes bite hard.

This week sees JPMorgan (NYSE: JPM), Citigroup (NYSE: C), and Morgan Stanley (NYSE: MS) in the spotlight.They're not the only stocks set to report this week, with Delta Airlines (NYSE: DAL) set to shine a light on the recovery of the travel sector, Taiwan Semiconductor Manufacturing Co (NYSE: TSM) reporting amid mixed results from other chip-makers, and UnitedHealth Group (NYSE: UNH) one of just a few stocks that set an all-time high within the last three months.

Gold stocks will be looking to build some momentum in the coming week, with a number of explorers like Regis Resources (ASX: RRL), Evolution Mining (ASX: EVN), and Northern Star Resources (ASX: NST) turning out a modest rise last week, despite a sharp slump in the price of gold. Gold enters the new trading week at US$1,742.50/oz.