Top 5 of the week: Powell’s speech and earnings reports

The reporting season will be in full swing this week, but concerns about persistently high inflation, the hawkish stance of the US Federal Reserve and uncertainty caused by the conflict in Ukraine are likely to continue to dominate market sentiment. Investors will be keeping a close eye on Fed chief Jerome Powell’s speech on Thursday, which is expected to be his last public appearance before the Fed’s May meeting. Meanwhile, oil prices will remain in focus amid reports that the European Union is considering a phased ban on Russian oil imports. Here’s what you need to know at the start of the week.

1. Powell’s speech

U.S. Federal Reserve Chairman Jerome Powell will speak at the International Monetary Fund’s spring meeting on Thursday and later in the day will participate in a panel discussion on the global economy alongside European Central Bank Governor Christine Lagarde and other central bank officials.

The Fed raised rates by a quarter percentage point at its March meeting and has since outlined another half-point hike in May.

Many Wall Street analysts and investors believe the Fed is not tackling high inflation fast enough, and now expect more rate hikes as the central bank catches up.

Data last week showed U.S. consumer prices rose 8.5 percent in March, the fastest annualized gain since 1981.

Several other Fed officials are also scheduled to speak during the week, including St. Louis Fed Chairman James Bullard, Chicago Fed Chairman Charles Evans and San Francisco Fed Chairman Mary Daly.

2- Earnings reports

As the reporting season heats up, several Dow blue chips are due to report during this week, including healthcare giant Johnson & Johnson , Procter & Gamble Company, International Business Machines and American Express Company. Investors will also keep an eye on the earnings of streaming giant Netflix Inc after the close of trading on Tuesday and electric car maker Tesla Inc on Wednesday, also after the market close.

Bank earnings reports will continue on Monday, with Bank of America Corp and Bank of New York Mellon reporting before the open of trading.

Signs that U.S. corporate earnings will be stronger than expected this year could bolster the case for other market sectors, including banks, travel firms and other companies that benefit from a growing economy, or the fast-growth and technology companies that have led the market higher for much of the past decade.

3. Economic data from the U.S.

The economic calendar in the US this week will be relatively light with a few updates from the housing market. Data on housing starts and building permits are due on Tuesday, followed by an update on existing home sales on Wednesday.

Housing market data will be closely watched as U.S. mortgage rates rise in response to higher market interest rates.

The weekly initial jobless claims report will be released on Thursday along with the FRB Philadelphia manufacturing index. Manufacturing and service sector activity data are due out on Friday.

4. Oil prices

Oil prices rose ahead of the long Easter weekend on Thursday on news that the EU may phase in a ban on Russian oil imports, which would support prices. The phased approach is intended to give Germany and other countries time to find alternative suppliers.

The proposed EU ban will not come up for discussion until after the final round of the French presidential election on April 24, so as not to hurt President Emmanuel Macron’s re-election chances.

The EU has already imposed five rounds of tough sanctions against Russia, but allies are pressuring it to do more. However, the bloc is not prepared to deal with the economic consequences of banning oil imports from the country that is its biggest supplier.

5- Economic data

China will release its first-quarter GDP data on Monday, but investors are likely to be more focused on the on March data on retail sales, fixed asset investment and industrial production to get more up-to-date information on how restrictions due to the coronavirus are affecting the world’s second largest economy.

The eurozone will release its final inflation data for March on Thursday, which is expected to confirm that consumer prices in the region rose 7.5% year-on-year, the fastest increase on record. Industrial production data for February, released on Wednesday, is expected to show a slight increase.

The Eurozone and the UK are due to release PMI data on Friday, which may begin to show some of the economic impact of the conflict in Ukraine. On the same day, the UK will release retail sales data for March, which is expected to show a second consecutive monthly decline


Notice: ob_end_flush(): failed to send buffer of zlib output compression (0) in /home2/xwealths/public_html/wp-includes/functions.php on line 5349