After a brilliant week of trading, the recent downward trend could possibly continue in the coming days. Weak US economic data and a gloomy jobs report recently put the recession issue back on the daily agenda. In addition to the current reporting season, the constellation in the Middle East should not be lost sight of.
Focus on US economic data and Fed speech at the start of the week
Compared to the previous week, the economic data calendar tends to be manageable.
Important China data will be published in the night from Sunday to Monday. The widely watched Caixin Composite Index for the Middle Kingdom could provide important impetus at the start of the week.
The first thing to watch out for on Monday afternoon is new ISM data for the services sector (16:00). The counterpart for the manufacturing sector had already disappointed last Thursday, bringing economic concerns to light.
A speech by Mary Daly from the Fed in San Francisco could provide impetus after last Wednesday's Fed meeting (23:00).
Weekly initial jobless claims by NFP in focus
While Tuesday, Wednesday and Friday are less relevant sources of impetus, the focus on Thursday at 2:30 pm is likely to be on the weekly initial jobless claims.
The official US labor market report (Non-Farm Payrolls) on Friday was significantly worse than expected (175,000) with 114,00 new non-farm jobs. At 4.3 percent, the unemployment rate was above expectations (4.1 percent).
Even if a weak labor market should tend to boost investors' fantasies of interest rate cuts, the associated recession worries could cause unease on the market. For the US Federal Reserve (Fed), it is a fine line to tread to combat inflation sustainably without stalling the economic engine.
Companies from the second and third tiers present their figures - Geopolitical risks not off the table
Even if none of the US stock market heavyweights present figures in the new trading week from the perspective of the reporting season, there could still be some impetus. For example, Uber and Airbnb will present their figures on Tuesday. On Wednesday, Walt Disney and on Thursday Eli Lilly will present their business figures for the past quarter.
The latest developments in the Middle East and the associated geopolitical risks should not be neglected either. Investors fear a conflagration in the region, which could also lead to distortions on the international stock markets.
