Top 5 Things to Monitor in the Markets for the Coming Week

The financial markets are always in a state of flux, influenced by various economic, political, and social factors. It can be difficult to navigate these fluctuations and make informed investment decisions. In this article, we will look at the top five things that investors need to watch in the markets for the upcoming week.

1. US Economic Data The US Federal Reserve’s decision to raise interest rates by 25 basis points at its May policy meeting has created uncertainty among investors regarding the future path of interest rates. The Fed’s preferred inflation measure, the core PCE price index, and the employment cost index, both due out on Friday, will be closely watched. Investors will also keep a close eye on Thursday’s figures on first-quarter GDP. The economic calendar will also feature reports on consumer confidence, durable goods orders, pending and new home sales, initial jobless claims, inflation expectations, and regional manufacturing activity.
2. Megacap Earnings Earnings results from some of the biggest names in the technology industry are due out in the coming week, with investors on the lookout to see if the strong gains in the tech sector so far this year are justified. Three out of the four largest US companies by market value – Microsoft, Google parent Alphabet, and Amazon – are all scheduled to report, with Microsoft and Alphabet due out on Tuesday followed by Amazon on Thursday. Facebook parent Meta Platforms is sandwiched in between on Wednesday. The performance of these companies can have a significant impact on the broader market.
3. European Bank Earnings Some of the most prominent European banks, including UBS, Deutsche Bank, Santander, and Barclays, are due to report earnings in the coming week. This is following a turbulent first quarter for banks, with the collapse of two regional US lenders and the dramatic demise of Credit Suisse and its takeover by UBS. The sector has since recovered, but it’s still worth $70 billion less than it was before Silicon Valley collapsed in early March. Credit Suisse has brought forward the release of its results to Monday, a day before UBS releases its first-quarter earnings.
4. Eurozone GDP The Eurozone will release advanced data on first-quarter GDP on Friday, along with April inflation reports from the region’s largest economies Germany, France, and Spain. The strong performance in the Eurozone’s dominant services sector could mean that wage pressures remain elevated, hampering the European Central Bank’s efforts to return inflation back to its 2% target. The ECB is expected to raise interest rates for a seventh straight meeting at its upcoming May meeting, with most analysts expecting a 25-basis point hike, although a larger increase has not been ruled out.
5. New BOJ Governor Takes Helm New Bank of Japan Governor Kazuo Ueda chairs his first policy meeting on Friday. While analysts are not expecting any changes to the central bank’s ultra-dovish monetary policy, they are on the alert for any potential surprises. Japanese inflation is outstripping estimates, but comments by Ueda in recent weeks indicate he believes stimulus settings remain appropriate for now.

In conclusion, staying informed and keeping a close eye on these five key areas will help investors navigate the financial markets in the coming week. Whether you are a seasoned investor or a newcomer to the markets, understanding the impact of these economic, political, and social factors is essential for making informed investment decisions.