The State of Markets
A brief review of all key upcoming events across the major regions of the globe & an overview of key recent market trends.
The State of Markets:
Despite better than expected earnings, US equity markets came under pressure last week. In particular, Fed commentary was relatively hawkish (e.g. with Powell playing down the Fed’s progress on inflation), while tensions in the Middle East continued to build. With that the S&P500 broke below its 50 day moving average, before testing a key level yesterday (the highs from late January & lows from early February, see key chart below). Other US indices also moved lower last week, with marked weakness in the NASDAQ100 (-5.4%) and Philly SOX 2000 (9.2%).
Of interest, though, after strength on Monday and Tuesday, both US Treasury yields and the dollar paused for breath/started to stabilise. Whether bond yields and the dollar are forming a near term top will be key for equity market direction in the week ahead. The oil price will also be watched closely.
Elsewhere markets will be focussed on earnings, with Meta, Microsoft, Google, and Amazon (amongst others) all due to report next week. There’s also a ‘PMI update’ for the US and other major economies due on Tuesday (for both manufacturing and service sectors); followed by US Q1 GDP on Wednesday; and PCE inflation (& income and spending) on Friday. Elsewhere there’s a PBoC policy decision (Monday) as well as speeches from a number of key central bankers. Please see below for a full list of key data and events.
Fig A: S&P500 futures candlestick, shown with its 50 day moving average
(All in London time BST)
Events: PBoC policy decision (2:15am); speech by the ECB’s Lagarde at Yale University (4:30pm).
Data: Eurozone consumer confidence (April first estimate, 3pm).
Earnings: N/A
Events: N/A
Data: Manufacturing & service sector PMIs for Japan (1:30am), France (8:15am), Germany (8:30am), Eurozone (9am), UK (9:30am) & US (2:45pm) – all April first estimates.
Earnings: Visa, Tesla, Pepsi.
Events: N/A
Data: German IFO business climate (Apr, 9am).
Earnings: Meta, Qualcomm.
Events: N/A
Data: US GDP (Q1 first estimate, 1:30pm).
Earnings: Microsoft, Google, Amazon.
Events: N/A
Data: US headline & core PCE inflation (Mar, 1:30pm).
Earnings: Exxon, Chevron.
Monthly Global AA No. 36, 17th April 2024:
“Eurozone Services Inflation: How Worried Should We Be?”
“there has been much less progress in….domestic inflation …
…the overall disinflation rate largely reflects the unwinding of the (global) supply shocks that were the primary source of the inflation surge in 2021-2022.”
(NB our bolding/underlining added)
Source: Philip Lane, ECB Chief Economist, 15th April 2024 speech
Eurozone inflation readings have fallen sharply in the past 12 months. Headline is currently 2.4% Y-o-Y (down from its peak at 10.6% in 2022); core is 3.0% Y-o-Y (from 5.7% last March); while the ECB’s ‘super core’ measure* is also notably lower (+3.3%, down from 6.3% last year).
Europe’s inflation path, therefore, has broadly followed that of the US (albeit with a 6 – 12 month time lag). US inflation was the first to rise, and the first to fall. Both Europe and the UK then followed. All of which is encouraging, at least on the surface
Events: N/A
Data: US Chicago Fed national activity (Mar, 1:30pm).
Earnings: Verizon.
Events: N/A
Data: Philadelphia Fed service sector activity (Apr, 1:30pm); US S&P manufacturing & service sector PMIs (April first estimates, 2:45pm); US new home sales (Mar, 3pm); US Richmond Fed manufacturing & business conditions (Apr, 3pm).
Earnings: Visa, Tesla, Pepsi, Novartis, Danaher, General Electric, Texas Instruments, Philip Morris, RTX Corp, NextEra Energy, UPS, Lockheed Martin, Freeport McMoRan, General Motors, Halliburton, Anglo American, Baker Hughes, ADM.
Events: Bank of Canada releases summary of deliberations for April meeting (6:30pm).
Data: Canadian retail sales (Feb, 1:30pm); US durable goods orders (March first estimate, 1:30pm).
Earnings: Meta, Roche, IBM, Qualcomm, AT&T, Boeing, Vale, Ford.
Events: N/A
Data: Canadian CFIB business barometer (Apr, 12pm); Canadian SEPH payroll employment change (Feb, 1:30pm); US GDP (Q1 first estimate, 1:30pm); US pending home sales (Mar, 3pm); US Kansas Fed manufacturing activity (Apr, 4pm).
Earnings: Microsoft, Google, Amazon, Merck, Intel, Nestle, AstraZeneca, Comcast.
Events: N/A
Data: US personal income & spending including headline & core PCE inflation (Mar, 1:30pm); US Michigan sentiment (April final estimate, 3pm); US Kansas service sector activity (Apr, 4pm).
Earnings: Exxon, AbbVie, Chevron.
Events: Speeches by the ECB’s Villeroy in Paris (8:30am). Lagarde at Yale University (4:30pm). Villeroy in Paris (4:30pm).
Data: Eurozone consumer confidence (April first estimate, 3pm).
Earnings: Reliance Industries, SAP ADR.
Events: Nagel in Berlin (1:30pm & 2:30pm).
Data: HCOB manufacturing & service sector PMIs for France (8:15am), Germany (8:30am) & Eurozone (9am) – all April first estimates.
Earnings: N/A
Events: Cipollone in Frankfurt (8:35am & 10:10am). Schnabel in Frankfurt (3pm).
Data: German IFO business climate (Apr, 9am); Italian ISTAT consumer & manufacturing confidence (Apr, 9am).
Earnings: Heineken.
Events: Schnabel in Frankfurt (8am). Vujcic on financial markets (9:20am). Panetta in Frankfurt (6:30pm).
Data: German GfK consumer confidence (May, 7am); French INSEE business & manufacturing confidence (Apr, 7:45am); French total jobseekers (Q1, 11am).
Earnings: N/A
Events: Centeno in Frankfurt (10am)
Data: French INSEE consumer confidence (Apr, 7:45am); Eurozone ECB 1 & 3 year inflation expectations (Mar, 9am); Eurozone M3 money supply (Mar, 9am).
Earnings: TotalEnergies.
Events: Speeches by the Bank of England’s Benjamin on developments in private equity (10:05am).
Data: Rightmove house prices (Apr, 12:01am). CBI industrial trends orders (Apr, 11am).
Earnings: N/A
Events: Haskel on inflation expectations and real economy (9am) & Pill at University of Chicago (12:15pm).
Data: Public sector finances (Mar, 7am); S&P manufacturing & service sector PMIs (April first estimates, 9:30am).
Earnings: N/A
Events: N/A
Data: N/A
Earnings: N/A
Events: N/A
Data: CBI distributive trade survey (Apr, 11am).
Earnings: N/A
Events: N/A
Data: GfK consumer confidence (Apr, 12:01am).
Earnings: N/A
Events: PBoC policy decision (2:15am).
Data: Australian Judo Bank manufacturing & service sector PMIs (April first estimates, 12am).
Earnings: N/A
Events: N/A
Data: Japanese Jibun Bank manufacturing & service sector PMIs (April first estimates, 1:30am).
Earnings: China Mobile, China Telecom, Zijin Mining.
Events: N/A
Data: Japanese PPI services (Mar, 12:50am); Australian headline CPI (Q1, 2:30am).
Earnings: N/A
Events: N/A
Data: South Korean GDP (Q1 first estimate, 12am); Japanese ESRI leading index (February final estimate, 6am).
Earnings: Hyundai
Events: Market holiday in Australia & New Zealand on account of ANZAC Day.
Data: N/A
Earnings: N/A
(Long)View from London, 19th April 2024:
“Is America Exceptional? Who Cuts First?”
Commodity Fundamentals Report No. 180, 18th April 2024:
“Copper: A False Start?"
Monthly Global AA No. 36, 17th April 2024:
“Eurozone Services Inflation: How Worried Should We Be?"
Longview Letter No. 144, 16th April 2024:
"UK: Not Enough Houses (or Too Much Debt)?"
(Long)View from London, 12th April 2024:
“How Tight is the US Labour Market? How Sticky is Inflation…..Really?”
Monthly Commodity Newsflow, 11th April 2024:
"What’s Driving Gold Prices?"
Monthly Global AA No. 35, 10th April 2024:
“UK Rates: More Cuts Need to be Priced"