Week Ahead

Next week investors will be looking for signs that the stock market is bottoming with earnings results from retailers including Costco, Macy’s, Nordstrom, and Best Buy taking center stage. Meanwhile, key data to watch include flash PMI surveys for major economies and personal spending and income for the US. Also, Federal Reserve will be publishing May meeting minutes and central banks in New Zealand, South Korea, Indonesia, and Turkey will be deciding on the monetary policy.

In the United States earnigs season will continue with Costco, Macy’s, Nordstrom, Best Buy, Zoom and Nvidia reporting. Also, all eyes will be on the FOMC minutes release on Wednesday, with investors looking for further confirmation the Fed will deliver another 50bps rate hike next month and in July. On the data front, personal income and spending will probably point to a slowdown in both household consumption and PCE inflation while flash S&P Global PMIs are seen falling this month. Other important releases include: 2nd estimate of GDP growth, corporate profits, final reading for the Michigan consumer sentiment, Chicago Fed National Activity index, Richmond Fed Manufacturing Index, new and pending home sales and durable goods.

Elsewhere in America, it will be interesting to follow: retail, wholesale and manufacturing sales for Canada; mid-month inflation figures, retail sales, trade and final GDP growth estimates for Mexico; and Brazil CPI reading for the mid-month.

In Europe, all eyes will be on the flash S&P Global PMI surveys for the Eurozone, United Kingdom, Germany and France, with all the region set to record a slowdown across both the manufacturing and the services sector due to the war in Ukraine and as the recovery from the pandemic starts to fade. Also, Germany Ifo business climate index is seen edging down again in May following a recovery from a 14-month low last month while the Gfk consumer index should point to a slight increase in confidence after hitting a record low in April. Other important data includes: Germany final first-quarter GDP data; UK public sector net borrowing; France jobless data; France and Italy business and consumer surveys; and Turkey business morale. Also, the Central Bank of Turkey is expected to hold rates steady when it meets on Thursday despite expectations of a further acceleration of inflation after it hit 70% in April.

In Japan, flash Jibun Bank PMIs will provide an update on the economic performance in May and CPI figures for Tokyo will probably show inflationary pressures continuing on the upside. China is expected to report industrial profits for the first four months of the year, which will provide an update on the impact of partial and full lockdowns, production and spending disruptions in April. Elsewhere in Asia, central banks from Indonesia, South Korea and Pakistan will decide on monetary policy, with South Korea expected to deliver another 25bps rate hike while the Bank Indonesialikely keeping borrowing costs steady. Inflation figures for Singapore, Malaysia and Hong Kong will also be in the spotlight.

In Australia, traders will also react to the Labor team victory in the parliamentary elections. It will be interesting to follow flash PMI figures, retail sales and investment-related indicators including capital expenditure.