The geopolitical climate continues to cause uncertainty. For now, markets remain in limbo between hopes for de-escalation and the reality of an ongoing simmering conflict. Monetary policy is likely to move more into focus in the short term and temporarily divert attention from geopolitical risks. Central banks could become the pace-setters, at least as long as no new geopolitical facts emerge. Investors continue to hope for a decisive impulse that could dictate the short-term direction in the markets with a single political tweet.
The economic calendar features numerous potential catalysts this week. The ongoing earnings season is also likely to continue to attract interest.
Investors hope for new impetus in the Middle East conflict – Strait of Hormuz remains in focus
The Iran conflict is likely to remain a central theme in the market in the coming days. After hoped-for peace negotiations stalled last weekend, investors are now hoping for new momentum. A second round of peace talks did not materialize last weekend.
According to media reports, Iran has reportedly submitted a new offer to the US, which includes opening the Strait of Hormuz.
US Federal Reserve Meeting on Wednesday Evening Anticipated: All Eyes on Jerome Powell
The Fed's central bank meeting could determine the fortunes of the stock market week. Late Wednesday evening (8:00 PM), the US monetary authority will report on the future level of key interest rates. Just half an hour later, Fed Chairman Jerome Powell will address the public (8:30 PM). This speech could provide important monetary policy impulses.
China data, ECB meeting and US price data round out trading week
In the night from Wednesday to Thursday, important Chinese economic data will also come into focus (03:30 AM), which could provide corresponding guidance for Thursday's trading. The Purchasing Managers' Index (PMI) for the manufacturing sector is expected.
Of interest will also be what the European Central Bank colleagues of the ECB decide on Thursday. The key interest rate decision is expected at 2:15 PM, and the press conference with President Christine Lagarde at 2:45 PM.
Additionally, at 2:30 PM, the core personal consumption expenditures rate and the GDP growth rate for the United States will be in focus.
US earnings season picks up steam
The reporting season, which is gaining momentum, is also likely to cast its shadow. Some Wall Street heavyweights are presenting their results for the past business quarter.
On Tuesday, reports are expected from Coca-Cola (US1912161007), General Motors (US37045V1008), and Visa (US92826C8394). On Wednesday, the figures from Alphabet A (ISIN: US02079K3059), Amazon (ISIN: US0231351067), Meta Platforms (US30303M1027), and Microsoft (US5949181045) will be the focus. On Thursday, Apple (US0378331005) is expected to report, and on Friday, Berkshire Hathaway B (ISIN: US0846707026).
Dow Jones Industrial Average Index
