This week has a number of events/releases that could influence the intermediate direction of the markets. Not in any particular order, META and MSFT report results on Wednesday, followed by AAPL and AMZN on Thursday.
Writing the incredibly obvious, these are four of the largest companies in the world and their results could considerably influence market direction and sentiment. Moreover, they could offer insight into AI and whether the massive spending in this sector is having its intended effect.
Wednesday is the release of initial estimates of first quarter GDP. The economy is expected to expand at an annual rate of 0.4%. As previously noted, both imports and gold purchases subtract from GDP. Imports are/surging ahead of the tariffs.
The Atlanta Fed has gone to great strides to comment about the impact of the massive import of gold, commenting that it could significantly negatively impact GDP estimates.
The GDP also includes the quarterly PCE statistics [the predominate inflation indices of the Federal Reserve] Will this data contain any inflationary impact from the announced but not yet implemented tariffs?
Finally, there are various employment statistics posted culminating Friday with the release of April’s BLS Labor report. Job creation has remained robust and the importance of such was again elevated to top tier attention given recent Fed statements about how job creation or the lack of thereof will influence immediate monetary policy decisions.
Speaking of inflation, according to the University of Michigan Consumer Sentiment Survey, , long term inflation expectations climbed to the highest since 1991 on fears of the economic fallout from tariffs.
The final sentiment index fell the fourth lowest in data back to the late 1970s, primarily from the feared results from the announced tariffs. The soft data is getting softer.
Will the hard data follow suit? This week’s data dump can help answer this question.
Commenting on Friday’s market direction, equities were mixed. The NASDAQ advanced nominally on GOOG’s results. The Dow was minimally lower. Treasury yields dropped across the curve causing an insignificant flattening of the curve.
As indicated, the economic calendar is filled with a number of top tier releases including initial estimates of first quarter GDP and the ancillary PCE data, JOLTS Job Openings, several sentiment surveys, the ISM as well as the ADP Private Sector Employment Survey and the BLS Labor Report.
Last night the foreign markets were up. London was up 0.16%, Paris up 0.88% and Frankfurt up 0.56%. China was down 0.20%, Japan up 0.38% and Hang Seng down 0.04%.
Futures are insignificantly lower. The 10-year is off 9/32 to yield 4.28%.
