Weekly outlook: Central banks, Faangs and a slew of macro data

The key events for UK wealth managers for the week starting 29 April

Monday 29 April

– Alphabet (Google) results

AJ Bell investment director Russ Mould noted the NYSE Fang+ index is up by 22% so far this year as momentum-driven tech stocks have appeared to come back into fashion after late 2018’s heavy sell-off.

“But earnings estimates are not going up, even if their share prices are, and the first-quarter results season will be the first real test of investor sentiment toward these stocks, especially as the fourth-quarter batch of figures looked so spotty,” he added.

Similarly, Psigma Investment Management head of investment strategy Rory McPherson said: “Tech earnings will likely be a key driver of market direction given tech has been leading – and driving gains this year.”

Tuesday 30 April

– Results from BP, Glencore and Standard Chartered in the UK

– Results from Lufthansa, Airbus, Repsol in Europe

– Results from Apple, GE and GM in US, as well as the world’s largest Reit, Simon Property Group

– UK consumer confidence

– EU GDP

– US consumer confidence

Mould said: “It will be interesting to see if consumer confidence bounces now stock market is rallying.”

Wednesday 1 May

– Federal Reserve meeting.

According to CBOE Fedwatch, there is a 98% chance of no change to rates and just a 2% chance of a cut.

Mould said: “The Fed policy pivot in 2019 is the single most important trend in financial markets today. With rates on hold and a likely end to quantitative tightening and balance sheet shrinkage in autumn on the cards from Fed, many others have followed by putting rate increases on backburner, with UK, ECB, Australia, NZ, Taiwan, Philippines, Japan, Canada and Sweden all following.

“Low rates are driving investors back to equities in search for yield, and bonds too, and this explains why markets are rising even when corporate earnings are mixed, economic indicators are mixed and geopolitics uncertain.”

McPherson said: “We don’t expect them to change rates but Powell’s press conference will be interesting for future direction as data has picked up recently and bond markets are still pricing in a 62% chance of a cut this year.”

– US ADP jobs data

– Sainsbury results

– Updates from Glaxosmithkline, Next, Persimmon

– In the US Kraft Heinz, Molson Coors, Yum Brands and Estee Lauder are reporting

– Manufacturing PMIs in UK and US

Thursday 2 May

– Bank of England meeting.

– Results from Shell, Lloyds and Reckitt Benckiser

– Barclays AGM

Mould said the Barclays AGM will be keenly watched as the bank looks to fend off activist Edward Bramson’s call for a change of strategy. He noted Barclays strong Q1 figures may help the bank’s chief executive Jes Staley and the Barclays board in their defence against Bramson’s proposals via his Sherborne investment vehicle, not least because the bank’s £1.5bn pre-tax profit was its best performance in the first three months of the year since 2013.

– EU manufacturing PMI

– UK construction PMI

– US Challenger job losses survey

Friday 3 May

– HSBC results

– UK and US services PMI

– Non-farm payrolls and wages in US

“The big question here is why are US rates on hold when unemployment is near late 1960s lows and wage growth is picking up?” said Mould.

 

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