This week's big schedule at a glance
Follow global central bank movements: the Fed is bound to be more hawkish; looking for clues to the Bank of Japan's interest rate hike
At 02:00 Beijing time on Thursday, the Federal Reserve announced the interest rate decision; at 02:30, Federal Reserve Chairman Powell held a monetary policy press conference
At 07:50 Beijing time on Thursday, the Bank of Japan announced the minutes of the March monetary policy meeting
Worrying inflation data for three months in a row shows that the Federal Reserve's progress towards the 2% target has stalled, which also indicates that the time for the first rate cut has been further delayed. The April 26 PCE data also highlights the strong momentum of the US economy. Investors think interest rates will be cut once or twice this year, or starting in November; however, more and more people are worried that the Federal Reserve may not cut interest rates at all in 2024. The market expects that the May FOMC meeting will keep interest rates high for more than 20 years; moreover, policymakers will not announce the latest interest rate forecasts until the June meeting.
Powell said last week that if price pressure continues, the Federal Reserve is prepared to maintain a restrictive policy “when necessary”; while Federal Reserve officials have recently repeated that they want to extend the current restrictive position. These views are all consistent with Powell's remarks, implying that there is no rush to cut interest rates.
James Knightley, chief international economist at ING, said: “The Fed's voice will inevitably be more hawkish than in March, and Powell is likely to repeat his statement. They'll still talk about the expected slowdown in inflation, but admit they really need to see this in a few months before they can relax their policies.”
According to the CME “Federal Reserve Watch” tool, the probability that the Fed will keep interest rates unchanged in May is 97.6%, and the probability of cutting interest rates by 25 basis points is 2.4%. The probability that the Federal Reserve will keep interest rates unchanged until June is 88.9%, and the probability of cutting interest rates in September is 43.8%.
Furthermore, investors can pay attention to the minutes of the Bank of Japan's March monetary policy meeting. Even though the minutes seem to have expired, that month was the last time the central bank ended negative interest rates and turned to interest rate hikes. Investors can explore more of the bank's plans for future interest rate policies from the minutes.
[Related Reading]:US stocks welcomed a strong rebound! The US is worried about “stagflation,” focusing on next week's Fed interest rate decision
Earnings season continues to be hot, with major earnings reports pouring in
On Monday, Beijing time$BYD COMPANY (01211.HK)$Release financial reports
After the market on April 30, EST,$Amazon (AMZN.US)$,$Super Micro Computer (SMCI.US)$,$Advanced Micro Devices (AMD.US)$Release financial reports
May 2nd at 7:30 CET,$Novo-Nordisk A/S (NVO.US)$Financial reports will be announced
After the market on May 2 EST,$Apple (AAPL.US)$Release financial reports
The popularity of earnings reports will not abate next week. In terms of Hong Kong stocks, BYD shares and a number of bank stocks, petroleum stocks, and brokerage stocks will announce financial reports; US stocks will focus on important individual stocks such as Apple, Amazon, AMD, and ultra-microcomputers after the market. It is worth noting that US stocks are halfway through the earnings season. Although unfavorable macroeconomic factors still exist, the profits of US companies have basically met Wall Street's optimistic expectations.
The data shows that out of about 230 S&P 500 companies that have published financial reports, about 81% have seen an increase in their performance. If this figure remains constant, it will be well above the 10-year average of about 75 percent. Geopolitical tension and the collapse of hopes that the Federal Reserve will cut interest rates caused the S&P 500 index to drop nearly 3% this month. Faced with this situation, American companies provided important support to the market. The financial results of the “Big Seven” Amazon and Apple next week will further guide the direction of the technology index. Financial reports from chip industry giants Ultramicrocomputer, AMD, and Qualcomm will also further indicate the current status and prospects of AI technology. Additionally, diet drug duo Eli Lilly and Novo Nordisk will also reveal results next week.
However, J.P. Morgan strategists warned that since the stock market was already strong and positions were tight before the earnings season, potential profit better than performance may not lead to a rise in the stock market.
US April Non-Farm Payroll Report Released
At 20:30 Beijing time on Friday, the US released non-farm payrolls data for April
The market will carefully study various economic data to be released by the US, especially non-farm payrolls data, to find signs that the US economy is cooling down. According to a series of data released earlier, the performance of the US economy fell short of expectations. The market rekindled the deal on the delayed interest rate cut by the Federal Reserve, which sparked discussions on whether the US economy had entered a “stagnant rise.”
Buffett Shareholders' Meeting Held
From May 3 to 5, Omaha time, the Berkshire Hathaway Shareholders' Meeting, an annual global investment event known as the “Spring Festival Gala for the Investment Community”, will be held in Omaha. The market is concerned about various topics, including Buffett's views on the Japanese stock market, as well as Berkshire's heirs and future development.
[Related Reading]:Watch and cherish! Buffett's shareholders' meeting is coming soon. What are the highlights worth paying attention to?
China's official manufacturing PMI and Caixin manufacturing PMI announced for April
At 9:30 Beijing time, China's official manufacturing PMI; 9:45, Caixin manufacturing PMI
China's official manufacturing PMI for March was 50.8%, up 1.7 percentage points from the previous month, above the critical point, and the manufacturing boom rebounded; in March, Caixin's manufacturing PMI was 51.1, a slight increase of 0.2 percentage points from 50.9 last month, and manufacturing sentiment improved for 5 consecutive months.
Multiple markets closed
The Hong Kong Stock Exchange and major European markets will have a one-day holiday on May 1; A-shares will be closed for three days starting May 1; the Japanese market will be closed on Mondays and Fridays; US stocks will be one of the few markets without a holiday next week.
Key earnings calendar for this week
[Related Reading]:Learn about the weekly key earnings calendar in one picture (4.29-5.3)
Monday April 29th
Keywords：Japanese stock market closure; BYD stock financial report
On Monday, in terms of economic data, the Dallas Federal Reserve Business Activity Index will be released.
In terms of major financial reports, BYD Co., Ltd. will announce financial reports.
The Japanese stock market is closed for one day.
Tuesday, April 30th
Keywords: China's official manufacturing PMI, Caixin manufacturing PMI; AMD, Amazon, ultra-microcomputer financial report
On Tuesday, in terms of economic data, China's official manufacturing PMI and Caixin manufacturing PMI will be announced.
In terms of major financial reports,$Amazon (AMZN.US)$,$Advanced Micro Devices (AMD.US)$,$Super Micro Computer (SMCI.US)$Other companies will release financial reports after the market today EST.
Wednesday May 1st
Keywords：US ADP employment numbers; Qualcomm financial report
On Wednesday, in terms of economic data, the number of people employed by ADP in the US, known as “small non-farmers,” will be announced.
In terms of major financial reports,$Qualcomm (QCOM.US)$Earnings will be announced after today's Eastern Time.
Hong Kong stocks and A shares are closed for one day.
Thursday May 2nd
Keywords: the Federal Reserve's May interest rate decision, Powell's press conference; number of jobless claims at the beginning of the week; Apple, Novo Nordisk financial reports
On Thursday, in terms of economic data, the number of jobless claims for the week ending April 20 will be announced.
In terms of economic events, the FOMC will announce the May interest rate decision. Federal Reserve Chairman Powell will hold a press conference after the resolution is announced.
In terms of major financial reports,$Novo-Nordisk A/S (NVO.US)$Financial reports will be announced at 7:30 a.m. CET (13:30 Beijing time today);$Apple (AAPL.US)$Earnings will be announced after today's Eastern Time.
The A-share market was closed for one day, and Hong Kong Stock Connect and Shanghai-Shenzhen Stock Connect were suspended.
Friday May 3rd
Keywords: non-farm payrolls
On Friday, in terms of economic data, US non-farm payrolls data will be released.
The A-share market is closed for one day; Hong Kong Stock Connect and Shanghai-Shenzhen Stock Connect are suspended; the Japanese stock market is closed for one day.
Saturday May 4th
Keywords: Berkshire shareholders' meeting
On Saturday, in terms of financial events, the Berkshire Shareholders' Meeting opened on May 3, Omaha time.
Good luck with your investments in the new week!
Editor/Jeffrey