Top Things to Watch
Paula Costa
Especialista em Finan?as Pessoais | Personal Finance Expert (Investidora e reformada aos 48 anos)
Why are stocks going down? This pullback can be attributed to fears over stubborn inflation, the Fed pushing back rate cuts, and an escalation from the Iran/Israel conflict. Such fears helped push the Volatility Index ($VIX), known as the "fear indicator" up to 19.2, its highest close since last October.
A curious fact: US Large Cap stocks ($SPY ETF) are up 28% over the past 3 years while Small Caps ($IWM ETF) are down 9%. This is happening because the prevailing narrative of higher interest rates is a worst scenario for smaller companies that generally spend a much higher percentage of their income on debt service, making them more sensitive to rising rates.
Today, there are no interesting events to look at, so take you time to prepare a month closure with profit.
April 30th
China: NBS Manufacturing Purchasing Manager Index
This index delivered by the National Bureau of Statistics (NBS) reports the performance of the Chinese manufacturing sector and is derived from a survey of large-scale, state-owned companies.
Markets will be looking at these manufacturing data for signs of a long-awaited recovery in the world's second largest economy.
Euro Zone: Consumer Price Index (CPI) YoY
The eurozone will be releasing inflation and economic growth data this Tuesday, and markets are pricing-in which a June rate cut by the ECB (European Central Bank).
Inflation has been falling but the longer-term outlook remains clouded by rising energy costs, stubbornly high services inflation and continued geopolitical tensions that threaten to disrupt trade.
The EUR (Euro) has pushed higher against the USD (US dollar) over the second half of April despite growing expectations that the FED will delay the start of the interest rate cutting cycle. However, if data sustains ECB position of a rate cut in June the narrowing of the rate differential between the two currencies might favour the USD, pushing EUR/USD lower.
May 1st
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US: FED interest rate decision
Although there's no expected surprise, you must keep in might that speculators and non-experienced traders will induce market volatility.
Investors will be awaiting indications about whether the Fed will cut interest rates at some stage this year. Expectations for interest rate cuts have faded as data on the labor market and inflation continues to surprise on the upside. The expectation of a rate cut is currently being pushed back to June and then September.
US: Crude Oil Inventories
The EIA (Energy Information Administration) publishes this report on a weekly basis and the level of inventories influences the price of petroleum products, which can have an impact on inflation.
Oil prices were down 1% this morning, as Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East and U.S. inflation data further dimmed the prospects of interest rate cuts anytime soon.
If the FED maintains its "higher-for-longer" interest rates position, the USD will strengthen ant that will pressure commodity prices, namely Oil. On the other hand, should China data reveal a frail domestic demand Oil prices will tend to come down.
May 3rd
US: Non-farm payrolls
Last week, the PCE (Personal Consumption Expenditures), also known as consumer spending, beat expectations continuing a string of reports that reinforce the hotter than anticipated inflation readings.
A strong consumption and a robust labour market keep on supporting the narrative for an economy that is resistant to high interest rates.
Last week, the GDP report came lower than expected and the USD fell slightly but turned around straight away as traders factored in the PCE increases.
Analysts anticipate a hot jobs number but lower than March reading. Volatility is expected to pick up as we approach this milestone event hence the FED is also mandated to assure maximum employment.
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6 个月Exciting week ahead with key economic events! ??
AI Innovation Leader | Senior Data Scientist Manager Specializing in GenAI, LLMs MLOps, & DevOps | GCP Vertex AI & AWS SageMaker Expert Driving Intelligent Solutions with RAG, Snowflake & Databricks | Technical Visionary
7 个月Great insights shared! The JPY surge is definitely an intriguing development. Here's a neutral take on the upcoming week: - Keep an eye on China's PMI and Eurozone CPI for economic health insights. - Fed's interest rate decision will be key, so prepare for potential volatility. - Oil inventories and non-farm payrolls data will influence market sentiment. - Set up alerts for price movements but remember market unpredictability. - Trading strategy: focus, diversification, and patience are key. - Education, analysis, and risk management are crucial for success. - Let's embrace the volatility and make informed decisions. - Wishing everyone a profitable trading week ahead!"
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7 个月Nice recommendations. It's important to pay attention to specific niche than trying to trade in all sides like oil, currency, crypto, whatever. I set up alerts to watch my loving assets, especially, I'm looking for big drops before jumping. Here is my process: - choose specific assets - learn the foundation and everything else that you can find online - set up alerts and search for huge drops, btw, it doesn't mean that the full recovery or more singificant drop you can land, but anyway, it works in most cases with the right support - don't put all eggs in one basket, be careful with that - patience is key. Trading demands experience and patience because everyone can lose, but with the right approach, it's a big chance to win.
Mentor at The Market Arts
7 个月JPY finally dumps and got that trade! please continue on sharing this kind of post, this would be a big help for the trader like me, it is like free alive fish without using any bait! Thank you!