Wall Street lifted by job data
- US stocks jumped last week, with the SPX500, DJ30, and NASDAQ100 all up significantly.
- In the SPX500, Energy stocks were a pain point, as the price of oil tumbled on the back of an agreement between OPEC and its allies to gradually begin increasing production between May and July.
- The job market has shown signs of improvement as the NFP report showed that there were 916,000 non-farm job openings last month, while economists polled by Reuters predicted an average of 647,000. The figure for February 2021 has been revised upwards to show 468,000 jobs created against an initial estimate of 379,000. The unemployment rate fell to 6.0% in March.
Earnings and inflation to impact markets
- Crucial Q1 earnings season: JP Morgan unofficially kicks off global Q1 corporate earnings season this week, on Wednesday. Consensus expectations for strong +26% YoY US earnings growth, led by cyclical energy and financial sectors.
- Bond yield test as inflation rises: Recent calming of US-year bond yields, and its support to tech rebound, to be tested this week with the March inflation report.
- A US inflation spike over 3% is forecast in coming months as we lap recession-lows, and boosted by higher energy prices and supply-chain bottlenecks.
- Last week, investors followed closely the publication of the Federal Open Market Committee meeting minutes, in which Fed officials estimated that the economy is still far from their targets and that there is no urgency to reduce the asset purchase program.
- The IMF forecasts have also lifted markets, as the institution revised its objectives upwards for global growth to 6% versus the previous 5.5%.
China GDP growth estimated lower
- According to Trading Economics data, The Chinese economy grew by a seasonally adjusted 2.6% in Q4 2020, following an upwardly revised 3% advance in the previous quarter and less than market expectations of a 3.2% expansion.
- This is the weakest quarterly growth since a contraction in the first quarter of 2020.
- China’s 2021 official Q1 GDP growth rate report, expected this Friday, is forecasted at 2.2%.
- The estimated number might change in the coming days.
Crypto news roundup
- State Street announced last week that it will be providing the infrastructure for a new bank-grade trading platform for crypto.
- The Coinbase IPO (Wednesday) could bring attention to the crypto markets as a whole.
- The amount of crypto circulating on exchanges, or being held in exchange wallets continues to decrease. More crypto being held is generally regarded as bullish.
The week ahead
- Coinbase IPO (Wednesday)
- Earnings season kicks off (Wednesday)
- Fed Chair Powell to speak at the Economic Club of Washington via satellite (Wednesday)
- China GDP data (Friday)
Written by a team of experienced financial analysts at eToro.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.