To start your trading week, let us have a peek at what the global market sentiment will be like this week through our Week In Review.
Friday’s end-of-week equities market rally occurred amid hopes markets are bottoming out. The slump could continue.
Investors are looking for definitive indicators that the market has bottomed because they fear the stock market’s steep decline is not over.
Here is what you should know for this week.
Week In Review – U.S. Economic Data
Investors will be watching economic data this week to see if the Fed’s aggressive tightening to combat surging inflation will result in a hard or soft landing for the economy.
The retail sales figures for April are expected to show solid gains due to steady auto sales on Tuesday. Despite higher inflation, economists predict a 0.8% increase after a 0.7% increase in March.
The U.S. will also provide regional manufacturing activity data along with figures on housing starts and existing house sales. As a result of higher mortgage rates, housing data is projected to decline.
Fed Chair Jerome Powell is expected to keep the US central bank’s plan to raise interest rates by a half-point at each of its next two meetings.
New York Fed President John Williams, St. Louis Fed President James Bullard, Philadelphia Fed President Patrick Harker, and Chicago Fed President Charles Evans are among the other Fed speakers this week.
Week In Review – Crypto Crash
Following a volatile week last week dominated by the collapse in the value of the stable coin TerraUSD, investors will be closely monitoring crypto assets in the coming week.
Stablecoins are tokens that are pegged to the value of traditional assets, most commonly the US dollar, and are the primary means of transferring money between cryptocurrencies or converting balances to fiat cash.
Fitch, a rating agency, says that investors losing faith in stable coins could have “significantly bad effects” on cryptocurrencies and digital finance, even though many regulated financial institutions have been investing more in the sector in recent months.
Fitch also said that the lack of links to regulated financial markets makes it less likely that the volatility of the crypto market will spread to other parts of the economy.
The crypto assets have been swept up in a broad-based selloff of risk assets amid concerns about rising inflation and interest rates, but the cryptocurrency crash has had little impact on broader financial markets so far.
Week In Review – Retail Earnings
Along with economic data, investors will be watching a slew of retail earnings reports this week for clues about how much the cost of living squeeze is eroding consumers’ spending power.
Walmart (NYSE:WMT) and Home Depot (NYSE:HD) are both expected to report fiscal first-quarter earnings before the market opens on Tuesday. Target (NYSE:TGT) and Lowe’s (NYSE:LOW) are set to report before the market opens on Wednesday, with Macy’s (NYSE:M) following on Thursday.
Investors will be watching retailers’ guidance for the second half of this year closely, given elevated inflation, higher wage, and fuel costs, and ongoing supply chain disruptions.
Keep an eye on the market prices and while you wait for your trade breakout, take advantage of the Juno Markets Economic Calendar to keep yourself updated with the market’s most important economic news events. https://www.junomarkets.com/en/resources/economic-calendar/
The Week Ahead
All times listed are EDT.
Monday, May 16
21:30: Australia – RBA Meeting Minutes
21:30: Eurozone – European Commission Spring Forecasts
Tuesday, May 17
02:00: Great Britain – Unemployment Rate MAR
02:00: Great Britain – Claimant Count Change APR
08:30: US – Retail Sales MoM APR
14:00: US – Fed Chair Powell Speech
19:50: Japan – GDP Growth Rate QoQ Prel Q1
Wednesday, May 18
02:00: Great Britain – Inflation Rate YoY APR
08:30: Canada – Inflation Rate YoY APR
08:30: US – Housing Starts APR
08:30: US – Building Permits APR
19:50: Japan – Balance of Trade APR
21:30: Australia – Unemployment Rate APR
Thursday, May 19
10:00: US – Existing Home Sales APR
19:01: Great Britain – Gfk Consumer Confidence MAY
19:30: Japan – Inflation Rate YoY APR
Friday, May 20
02:00: Great Britain – Retail Sales MoM APR