The earnings report and NFP numbers

Weekly Outlook, 2- 7 May

By: Ahura Chalki

Market analyst – IFC Markets

While earnings reports will be continued in the week ahead, BoE and RBA policy meetings and press conferences will also be the center of attention. Also, we should follow Powell and other FOMC members` speeches and wait for solid job data on Friday`s NFP report. Let`s take a look at the most important events of the week.

Earning reports. 

Last week as we were expecting, new records have been printed in all Wallstreet indices, while it is going to be another week with another set of new records for stock markets. At the last week`s Fed meeting, the central bank stayed committed to full employment and interest rate goals. According to the latest Refinitiv data, so far, 303 companies from the S&P 500 list reported their earnings for Q1 2021, and 87.1% of them have beaten expectations. Last quarter the beating rate was about 76%. This week another 139 companies from the S&P 500 list will report, including Uber, Pfizer, AIG, and Lyft, AMC, and General Motors. 

SP500 looks at 4,230 and 4,260 levels on its current;y uptrend; however, profit taking by investors at these record levels can be the main risk at the moment for a correction in the week ahead, under the 4,000 level. 

NFP data on Friday

The week`s event will surely be Friday`s employment report, which is the FED`s primary commitment at the moment. We are waiting for a 5.7% unemployment rate, down from 6% in March. Nonfarm Payrolls are expected to rise 950k from a previous 916k. We expect profit-taking in stock markets and upbeat economic numbers. While treasure yields are also growing, the USD index to grow above 91.20 level; however, technically, under 91.00 levels, deeper numbers are expected to come into the spotlight. 

Central bank`s meeting in UK and Australia

Australian central bank Interest Rate Decision, Statement, and press conference will be on Tuesday. No change is expected in this meeting`s rates and monetary policy until a target inflation rate between 2 and 3% will be achieved. 

While from the Bank of England meeting on Thursday, we expect to lower the stimulus and ease on bond purchases level at its meeting as Britain`s economy is strongly recovering from the worst recession of the past 300 years. In the February meeting, the BoE forecast the economy to grow 5% this year after a 10% contraction of the past year. With the expecting decision of BoE and USD growth, we are expecting more downtrend under the 1.38 level. 

Economic data, Important speeches.

On the light economic calendar, Monday ISM Manufacturing PMI and New Orders, both expected to raise, later on, the same day, will have speech. However, we are not expecting any surprises from that. 

Wednesday ISM service data and ADP numbers will be published. US oil inventory levels by EIA. Thursday Jobless claims are essential; however, traders probably will be waiting for Friday`s NFP number to react. During the week, most FOMC members, including Robert Kaplan, John Williams, Neel Kashkari, and Eric Rosengren Loretta Mester, speak. 

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