Ahead in wall street :- The weekis expected to be busy with the Federal Reserve’s policy meeting, the US’s employment report, the earnings of the “Magnificent Seven” tech companies, and closely watched economic data from the euro zone and China.
Fed Decision on Interest Rate Cuts
- Investors await Fed’s decision on interest rate cuts.
- Fed Chair Jerome Powell emphasizes need for more confidence in inflation’s 2% goal before rate cuts.
- Inflation data for March aligned with consensus, reducing expectations for September rate cut.
- Expectations for interest rate cuts have faded due to positive labor market data and inflation.
U.S. Labor Market Outlook
- Expected 243,000 jobs added in April, moderating from 303,000 in March.
- Unemployment rate expected to remain steady at 3.8%.
- ADP data on private sector hiring and JOLTS job openings to support expectations.
- Investors await Tuesday’s employment cost index data for signs of cooling labor market inflation pressures.
Tech Earnings Reports
- Amazon and Apple are the last “Magnificent Seven” megacaps to report.
- Apple shares have fallen over 10% this year, and first quarter earnings are expected to decline.
- Amazon’s cloud computing business will be a focus, along with consumer spending.
- Microsoft and Google parent Alphabet’s reports helped the S&P 500 gain its biggest weekly gain since November.
- Peers like Tesla and Meta Platforms have had mixed performances.
- JPMorgan analysts caution that potential earnings beats may not lead to equity upside due to strong equities run and stretched positioning.
China PMI Data Expectations
- Market observers await April manufacturing data for signs of recovery in China’s second largest economy.
- Official figures for China’s purchasing managers’ index due on Tuesday.
- Positive data would aid policymakers in boosting growth and investor sentiment.
- Global investment houses are bullish on Chinese stocks, boosting the blue-chip index.
- Beijing faces currency issues, with the yuan sliding against the dollar but stronger against major trading partners.
Eurozone Data Release
- Eurozone to release inflation and economic growth data on Tuesday.
- Data likely to boost market bets for ECB’s June rate cut.
- Inflation has dropped, but long-term outlook is influenced by rising energy costs, high services inflation, and geopolitical tensions.
- Expected GDP expansion of 0.2% in Q1 compared to year-over-year.
- Inflation progress expected to stall, with consumer prices rising by 2.4% in April due to rising energy costs.
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Investors await Tuesday’s U.S. inflation data to gauge Fed interest rate cuts, with February’s consumer price index expected to rise 0.4% after a faster increase of 0.3% in January.
Fed Chair Jerome Powell indicated that a rate cut may be appropriate this year, but he and his team are not yet prepared. Market observers will also be examining February’s retail sales data, which is expected to rebound 0.8% after a similar decrease a month earlier.
The economic calendar also features updates on industrial production, consumer sentiment and weekly data on initial jobless claims.
Fed officials will be entering the traditional blackout period ahead of their upcoming meeting next week.
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