Market sentiment: Neutral 1 day
Recap of the past week:
Recap of the past week: We’ve seen a week of BIG TECH results and the first estimate of US GDP Q1 with mixed market reactions. META “disappointed”, while Google and Microsoft pleased. US GDP disappointed, but the market took it more or less as Bad News Is Good News. However, market sentiment indicator did not deteriorate further and the RiskOff environment rather continued to lose ground and slowly moved into neutral.
Outlook for the following week:
We won’t rest this week though, outside of more big company earnings we are in for a huge dose of strong macro data. First estimates of German and EU inflation, Chinese PMI, FOMC and NFP. But first things first…
We’ll start off sharp on Monday and get new German inflation numbers. Expectations are for stagnation or a slight decline, which would support the first rate cut from the ECB (before the Fed).
On Tuesday we’ll get Australian Retail Sales and Chinese PMIs in Asia. During the EU session, it will be all about GDP and inflation numbers estimates for EU economies. Mainly EU inflation numbers are going to be of market interest. In the US we’ll see Chicago PMIs and Consumer Confidence. We will also see the results of e.g. Amazon Inc., The Coca-Cola Company, Advanced Micro Devices, Inc., McDonald’s Corporation, Mondelez International, Inc. etc.
On Wednesday, the main macro day of the week, the focus will be mainly on the US market. We will get ADP Employment Change and ISM Manufacturing PMIs. Then we’ll just wait for the FOMC and as always especially for Jerome Powell’s subsequent press conference. The market will be looking for any signs of further Fed steps and will be interested in the Fed’s stance on the latest inflation figures developments. Currently, the market is pricing in the first CUT in September. We’ll also also get results from e.g. Mastercard Incorporated, QUALCOMM Incorporated, Pfizer Inc. etc.
On Thursday we’ll get regular weekly update of the US labor market numbers. However, the market will mainly be looking for Apple’s results. No glory is expected there (declines of sales in China) but most of the negation should already be included in valuations.
We won’t get bored on Friday either. All eyes will be on NFP data. The market will be looking for signs of slight weakening of strong labor market. We will also get the ISM services PMI. Friday will also bring another round of Q1 results – namely Berkshire Hathaway Inc.
Long-term sentiment
Negative RiskOff market sentiment has gradually faded into the neutral zone mostly thanks to BIG TECH results. It will be very important how key events gona play out in the upcoming week. Especially the Fed has the potential to swing the market and market sentiment indicator on both sides. Hence, moodix trading systems will be down until Wednesday.
Good luck! Team moodix!