Key Factors
Key Factors :
Key Factors : Huge week ahead with the Fed and BoE delivering their policy decision topped up with the release of many key economic data inlcuding the US NFP report.
Weekly Economic calendar USA JAN 29 to Feb 2
Monday
- 10:30 AM Dallas Fed Manufacturing for January
Tuesday
- 7:45 AM ET ICSC Weekly Retail Sales
- 8:55 AM ET Johnson/Redbook Weekly Sales
- 9:00 AM ET Monthly Home Prices M/M for November
- 9:00 AM ET S&P CaseShiller 20-City M/M for November
- 10:00 AM ET JOLTs Job Openings for December
- 10:00 AM ET Consumer Confidence for January
- 4:30 PM ET API Weekly Inventory Data
Wednesday
- 7:00 AM ET MBA Mortgage Applications Data
- 8:15 AM ET ADP Employment Change for January
- 8:30 AM ET Employment Costs for Q4
- 9:45 AM ET Chicago PMI for January
- 10:30 AM ET Weekly DOE Inventory Data
- 2:00 PM ET FOMC Meeting – no rate change expected.
Thursday
- 7:30 AM ET Challenger Job Layoffs for January
- 8:30 AM ET Weekly Jobless Claims
- 8:30 AM ET Continuing Claims
- 8:30 AM ET Nonfarm productivity for Q4
- 8:30 AM ET Unit Labor Costs for Q4-P
- 9:45 AM ET S&P Global Manufacturing PMI, Jan-F
- 10:00 AM ET ISM Manufacturing for January
- 10:00 AM ET Construction Spending M/M for December
- 10:30 AM ET Weekly EIA Natural Gas Inventory Data
Friday
- 8:30 AM ET Nonfarm Payrolls for January
- 8:30 AM ET Private Payrolls for January
- 8:30 AM ET Manufacturing Payrolls for January
- 8:30 AM ET Unemployment Rate for January
- 8:30 AM ET Average Hourly Earnings M/M for January
- 10:00 AM ET Factory Orders M/M for December
- 10:00 AM ET Durable Goods Orders M/M for December
- 10:00 AM ET University of Michigan Confidence, Jan-Final
- 1:00 PM ET Baker Hughes Weekly rig count data
TOP FACTORS IN WALL STREET
Fed ahead
Investors expect the Fed to leave interest rates unchanged on Wednesday, but they are keen to see if officials believe they have made enough headway against inflation to drop rates sooner rather than later.
Following good economic statistics and Fed officials’ comments that cuts may not be as forceful as predicted, investors have raised estimates for the Fed’s first rate drop to May from March.
On Friday, inflation moderated but consumer spending remained strong, raising concerns that price pressures could rise again.
Investors will scrutinize Fed Chair Jerome Powell’s post-policy meeting press conference for clues on how officials are interpreting economic data.
Jobs report
The January jobs report, released on Friday after the Fed decision, is likely to show 177,000 new positions, down from 216,000 the month before.
The recent stock market rise has lifted the S&P 500 to new highs on prospects of a U.S. economic “soft-landing” with stable GDP and low inflation.
A worse report might imply that the Fed’s 525 basis points of rate hikes since 2022 are finally taking effect, while better hiring could support the central bank’s decision to keep rates higher.
On Tuesday, JOLTS job opportunities and consumer confidence are reported, followed by private sector payrolls and weekly initial jobless claims on Thursday.
Megacap earnings
Five of the big “Magnificent Seven” growth and technology stocks that have driven markets higher for much of the last year will report earnings this week.
On Tuesday, Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) will report earnings, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday and Meta Platforms (NASDAQ:META) on Friday.
The Magnificent Seven’s results will determine whether the S&P 500 can retain its momentum in a bull market.
Alphabet, Microsoft, Apple, Amazon, and Meta control 25% of the S&P 500, providing them a large impact on its performance.
“There’s not this monolithic performance among those stocks anymore,” Charles Schwab chief investment strategist Liz Ann Sonders told Reuters. A decline in earnings could depress the market as a whole.
The Bank of England
The BoE is expected to leave interest rates on hold on Thursday and may withdraw its long-held warning that it will boost rates again if inflation rises, but it is expected to imply that rates must remain tight for a long time.
Wage growth was the slowest in almost a year in the three months to November, but inflation unexpectedly jumped to 4% in December in the latest U.K. jobs report.
Britain’s economy started 2024 strong, but last week data showed that Red Sea supply shortages are causing manufacturing inflation.
The BoE hiked interest rates 14 times between December 2021 and August 2023, peaking at 5.25% after inflation reached a 41-year high of 11.1% in late 2022.
China PMIs
On Wednesday, China’s official purchasing managers’ index (PMI) statistics may suggest that the world’s second largest economy remains fragile.
China’s economy grew 5.2% in 2023, but a lengthy housing crisis, rising deflationary threats, and decreasing global growth cloud its post-pandemic recovery.
Last Wednesday, China’s central bank lowered bank reserves by 50 basis points, the largest cut in two years, signaling support for a shaky economy and falling stock markets.
Still, analysts say further stimulus is needed this year to stabilize the economy.
Weekly Global Market Calendar (29 Jan-02 Jan)
Monday, JAN 29
Tuesday, JAN 30
- Japan Unemployment Rate
- Eurozone Q4 GDP
- US Job Openings
- US Consumer Confidence.
Wednesday, JAN 31
- BoJ Summary of Opinions
- Japan Industrial Production and Retail Sales
- Australia CPI
- Chinese PMIs
- Switzerland Retail Sales
- UST Quarterly Refunding Announcement
- US ADP
- Canada GDP
- US ECI
- FOMC Policy Decision.
Thursday, Feb 01
- China Caixin Manufacturing PMI
- Switzerland Manufacturing PMI
- Eurozone CPI
- Eurozone Unemployment Rate
- BoE Policy Decision
- US Challenger Job Cuts
- US Jobless Claims
- Canada Manufacturing PMI
- US ISM Manufacturing PMI
Friday, Feb 02
- Australia PPI
- US NFP.
Global Events in details date wise
Tuesday Jan 30
US Job Openings
Job openings in the United States are expected to dip to 8.750 million in December, down from 8.790 million in the previous month. Job openings have slowly decreased since their peak in 2022, as the labor market has continued to improve. As a reminder, the last report shocked on the downside, with both hiring and resignation rates dipping below pre-pandemic levels. It will be interesting to examine how the Fed’s turn and the aggressive easing of financial conditions affected the data.
US Consumer Confidence
Consumer confidence in the United States fell gradually in the fourth quarter of 2023 due to a worsening labor market, but it unexpectedly rose in December to levels not seen since July. In contrast to the University of Michigan Consumer Sentiment, which measures how consumers see their personal finances, Consumer Confidence reflects how consumers perceive the labor market. The consensus expects the indicator to rise to 115.0 in January from 110.7 in December.
Wednesday JAN 31
RBA Trimmed Mean CPI YoY
The Australian quarterly inflation report is expected to ease across all measures. The CPI Y/Y is predicted to be 4.3%, down from 5.4% the previous year, while the Q/Q figure is expected to be 0.8%, down from 1.2%. The RBA is more focused on underlying inflation indices, which are likely to fall as well. In reality, the Trimmed Mean CPI Y/Y is predicted to be 4.4%, down from 5.2% in the previous year, while the Q/Q number is expected to be 0.9%, down from 1.2%. We’ll also get the monthly CPI figure, which is predicted to fall further to 3.7% from 4.3% previously. The statistics will have little impact on the RBA’s February meeting, but it will influence market pricing, which currently anticipates the central bank to begin decreasing rates in August.
US Employment Cost Index
The Q4 US Employment Cost Index (ECI) is predicted to be 1.0%, up from 1.1% in the previous quarter. This is the most comprehensive measure of labor costs, however it is not as current as the Average Hourly Earnings statistics. However, the Federal Reserve pays special attention to this signal. Wage growth has slowed in the last two years, but it still remains reasonably high.
The Federal Reserve
The Federal Reserve is projected to leave the FFR steady at 5.25-5.50%. Given that the 3-month and 6-month annualised rates are currently below the 2% objective, the central bank may acknowledge progress by modifying the sentence in the announcement from “any additional policy firming” to “sufficiently restrictive”. Beyond that, there should be few changes, and the focus will shift to the press conference, where Fed Chair Powell will undoubtedly be questioned about the aggressive easing of financial conditions since the December meeting, the falling inflation rate, and the change in their quantitative tightening policy.
Thursday Feb 01
Eurozone Core CPI YoY
The Eurozone CPI Y/Y is predicted to be 2.8%, down from 2.9% in the previous year, while the Core Y/Y is expected to be 3.2%, down from 3.4% previously. The market continues to expect the ECB to lower interest rates in April, despite the fact that the central bank continues to push back against such expectations, with the first cut expected in the summer. However, if the data continues to be missing, the ECB will struggle to sustain its patience. We will also see the current unemployment rate, which is predicted to continue at 6.4%.
BoE
The BoE is anticipated to retain the Bank Rate at 5.25%. The data leading up to the meeting was mixed, with some further softening in the labor market and wage growth, but a surprise hot CPI report. Furthermore, retail sales fell sharply in December, while PMIs improved in January. The central bank will most likely maintain its patient stance, indicating that interest rates will remain high for long enough to return to the 2% target.
US Unemployment Claims
The US Jobless Claims report remains one of the most essential releases each week since it provides a more timely signal of the status of the labor market. Initial Claims continue to linger around cycle lows, while Continuing Claims, after reaching a new cycle high, have begun to decline. This week’s consensus is for Initial Claims to be 210K, up from 214K the previous week, while there is no consensus for Continuing Claims, though the previous report showed an increase to 1833K from 1806K.
US ISM Manufacturing PMI
The US ISM Manufacturing PMI is predicted to rise to 47.3 from 47.4. Last week, the S&P Global Manufacturing PMI for January returned to expansion at 50.3, the highest level since October 2022. Perhaps the recent rapid easing in financial conditions following the Fed’s pivot spurred a renewed growth impetus, and if so, it will be difficult for the market to explain the six rate reduction now scheduled for this year.
Friday Feb 02
US Unemployment Rate
The US NFP is predicted to show 173K jobs added in January, compared to 216K in December, and the unemployment rate will rise to 3.8% from 3.7% previously. The Y/Y average hourly earnings are predicted to be 4.1%, up from 4.1% in the previous year, while the M/M measure is expected to be 0.3%, up from 0.4% in the prior year. The previous data contained some noticeable underlying issues, with the household survey, for example, suggesting the greatest employment loss since the April 2020 lockdown, so some additional weakness under the hood may start to unnerve the market.
WEEKLY EARNINGS CALENDAR
Monday, JAN 29
Celestica, Whirlpool
Tuesday, JAN 30
Algoma Steel, Canopy Growth, Metro, CAE, CP Rail, Pfizer, JetBlue, UPS, GM, AMD, Mondelez, Alphabet Starbucks, Microsoft, Electronic Arts
Wednesday, JAN 31
Boeing, Mastercard
Thursday Feb 01
Apple, Amazon, Meta, Peloton, Sirius
Friday, Feb 02
TKO, Abbvie, Chevron, Imperial Oil, Exxon
For details
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