Ahead this week: Apple Conference, US Tradereport Deficit and Consumer credit report.
Main global factors for the week Ahead
Key factors on watch in this week
The stock market is rising
Some investors are growing more and more concerned about the extent to which market gains are now mostly driven by the outperformance of a select group of megacap stocks, while the rest of the market remains stagnant.
The benchmark S&P 500 has increased 11.5% year to date and is currently trading at a 10-month high, outpacing the tech-heavy Nasdaq 100’s gain of 33% so far in 2023.
Five companies now make up 25% of the market value of the S&P 500: Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Nvidia (NASDAQ:NVDA). The buzz surrounding developments in artificial intelligence is fostering expectations for sizable future gains.
A surge that is concentrated in a small number of equities raises concerns about the health of the market as a whole and runs the danger of causing instability.
monetary policy decisions
This week, the Reserve Bank of Australia and the Bank of Canada will also hold policy meetings in advance of the Federal Reserve’s next meeting as officials in both nations deal with still-persistent inflation.
After April’s inflation statistics increased significantly more than anticipated, the RBA’s decision on Tuesday could go any way.
After a sudden increase last month, rates are already at an 11-year high. RBA governor Philip Lowe said he did it to make it clear that the central bank will do whatever it takes to defeat inflation.
Markets anticipate a hawkish hold from the BOC, which would mean that rates may be increased again in July barring any signs of a slowing of inflation.
Eurozone data
MONDAY
Statistics on trade, factory orders, and industrial production are scheduled to be released on Monday in the Eurozone. This comes after statistics revealed last week that the region’s largest economy fell into recession in the first quarter.
On Monday, ECB President Christine Lagarde will give a testimony before the European Parliament’s Committee on Economic and Monetary Affairs, and her words will be extensively scrutinised.
TUESDAY
On Tuesday, the European Central Bank will release the findings of its consumer expectations poll, which will demonstrate if inflation expectations are solidifying.
THURSDAY
Before the central bank begins its quiet period on Thursday ahead of its June 15 meeting, further ECB officials are scheduled to appear.
world economic estimates from the World Bank and OECD
When the World Bank announces its most recent forecasts for global growth on Tuesday, followed a day later by the OECD with its own expectations, investors will receive an update on the outlook for the global economy.
The World Bank issued a dire warning last month about a slow-growth crisis in the world economy that might last for the next ten years due to instability in the banking sector, rising inflation, the continuing repercussions of Russia’s invasion of Ukraine, and three years of COVID-19.
The OECD, on the other hand, increased its predictions for global growth back in March, stating that it anticipates growth to reach 2.6% this year and 2.9% in 2024, but cautioned that the outlook remained fragile and that risks were still heavily weighted to the downside.
US Weekly Schedule
In focus this week
The Worldwide Developers Conference for Apple
Just days after Meta debuted its most recent virtual reality (VR) headset on Thursday, Apple will conduct its international developers conference on Monday, where it is anticipated to announce upgrades to its operating systems, new Macs, and unveil a mixed reality headset.
Other events;
U.S. Factory Orders (April)
Institute of Supply Management services survey (May)
Wednesday, June 7
What’s New Regarding the US Trade Deficit
The U.S. Department of Commerce will provide us with the most recent information on the U.S. trade imbalance on Wednesday. The trade deficit is expected to have increased in April from $64.2 billion in March to an anticipated $75 billion. A decreasing trade deficit helps to increase the country’s gross domestic product, or GDP, making it a crucial indicator of the health of the economy.
data on consumer credit
The Federal Reserve will publish data on consumer credit on Wednesday, providing information on the health of consumer borrowing in the United States in April. Consumer borrowing increased by $26.5 billion in March, at its quickest rate in four months, as credit card balances increased by 17.3%. The March data revealed that despite rising borrowing costs brought on by the Federal Reserve’s interest rate hikes, consumer spending has remained robust. In April, a drop in consumer borrowing to roughly $20 billion is anticipated.
Thursday, June 8
Wholesale Inventories (April)
Global economic calendar for week ahead
MONDAY
USA
S & P GLOBAL SERVICES & COMPOSITE PMI FINAL (MAY), FACTORY ORDERS (APR)
EURO AREA
HCOB SERVICES AND COMPOSITE PMI FINAL (MAY), PPI (APR)
JAPAN
JIBUN BANK SERVICES AND COMPOSITE PMI FINAL (MAY)
CHINA
CAIXIN SERVICES AND COMPOSITE PMI (MAY)
TUESDAY
EURO AREA
HCOB CONSTRUCTION PMI(MAY), RETAIL SALES (APR)
JAPAN
HOUSEHOLD SPENDING (APR)
WEDNESDAY
USA
API/EIA CRUDE OIL STOCK CHANGE , MBA MORTGAGE APPLICATIONS (FOR WEEK ENDED JUNE 2), BALANCE OF TRADE (APR), USED CAR PRICES (MAY)
CHINA
BALANCE OF TRADE (MAY)
THURSDAY
USA
INITIAL JOBLESS CLAIMS (FOR WEEK ENDED JUNE 3), WHOLESALE INVENTORIES (APR)
EURO AREA
Q1CY23 GDP GROWTH (3RD ESTIMATES)
JAPAN
Q1CY23 GDP GROWTH FINAL, CURRENT ACCOUNT (APR)
FRIDAY
CHINA
INFLATION, PPI (MAY)
WEEKLY U.S. ECONOMIC AND EARNINGS CALENDAR
Monday
Economic data:
S&P Global US Services PMI, May final (55.1 expected, 55.1 previously);
S&P Global US Composite PMI, May final (54.5 expected, 54.5 previously);
Factory orders, April (+0.8% expected, +0.9% previously);
Durable goods orders, April final (+1.1% expected, +1.1% previously)
ISM Services Index, May (52.4 expected, 51.9 previously)
Earnings:
No earnings
Tuesday
Economic data:
None
Earnings:
Academy Sports + Outdoors (ASO), Casey’s General Stores (CSY), Cracker Barrel Old Country Store (CBRL) Dave & Busters (PLAY), The J.M. Smucker Co. (SJM), Stitch Fix (SFIX)
Wednesday
Economic data:
MBA weekly mortgage applications, week ended June 2 (-3.7% previously)
Earnings:
Campbell Soup Company (CPB), GameStop (GME), Rent the Runway (RENT), The Lovesac Company (LOVE), Vera Bradley (VRA)
Thursday
Economic data:
Weekly initial jobless claims (238,000 expected, 232,000 previously)
Continuing claims, week ended May 27 (1.8 million expected, 1.8 million previously)
Wholesale inventories, month-over-month, April (-0.1% expected, +0.1% previously)
Wholesale trade sales, month-over-month, April (+1% expected, -2.1% previously)
Earnings:
Docusign (DOCU), Duckhorn Portfolio (NAPA)
Friday
Economic data:
No data
Earnings:
Nio (NIO)