As we head into a new week, it is crucial to keep a close eye on various market indicators. The Research Team emphasizes the importance of monitoring not only the 2-year and 10-year UST yields but also the US Dollar Index and energy markets, specifically oil and gold. These indicators can give us valuable insights into the overall health of the economy and potential market trends.
On the data front, there are several key events to watch out for this week. The headline events include the US GDP Advance estimate on Thursday and the PCE Price Index on Friday. Additionally, durable goods orders and housing metrics such as New Home Sales and Pending Home Sales will provide further insights into the state of the US economy. In Europe, the UK, and the US, investors will be looking forward to April’s S&P Global PMIs for a better understanding of global economic performance.
In the Asia Pac region, all eyes will be on the CPI inflation data from Australia on Wednesday and the Bank of Japan (BoJ) rate announcement on Friday. These events will have implications for both regional markets and the broader global economy. It is essential to pay attention to any shifts in monetary policy or economic conditions that may impact investment decisions.
On the earnings front, investors will be closely watching for data from major tech companies such as Tesla, Microsoft, Meta, and Google starting on Tuesday. With major US equity markets experiencing a downturn last week, the focus will be on how these earnings reports could potentially impact market sentiment. The S&P 500 market average slumped -3.0% last week, marking the largest one-week decline since March 2023.
As market participants await the first estimate for US GDP in Q1 2024, expectations are for cooling economic activity. The anticipated annualized growth rate just north of 2.0% is a decrease from previous quarters. However, there is potential for an upside surprise, as the Atlanta GDPNow model estimates higher growth. A positive outcome could lead to increased demand for the USD and potential adjustments in rates markets.
The PCE Price Index data is also expected to be released this week, with a slight increase predicted for both headline and core measures. While headline PCE data is anticipated to show a rise to +2.6%, the core measure may see a slight decline to +2.7%. These figures will provide valuable insights into inflation trends and their impact on consumer spending and overall economic health.
Investors should remain vigilant and stay on top of these key data releases and events to navigate the ever-changing financial landscape. By monitoring these indicators closely, one can make informed decisions and better position themselves in today’s dynamic markets.
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