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In this Global Week Ahead, the first-quarter earnings season launches.
On Thursday, the Q1 earnings season unofficially starts for 2017. A burst of large bank quarterly results come out, including JP Morgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) , Citigroup (C - Free Report) , BlackRock (BLK - Free Report) and PNC Financial (PNC - Free Report) .
Last week, tomahawk missiles fired at Syria, U.S. Navy ships were sent nearer to North Korea, and China’s trade relationship with the U.S. helped push up the value of safe haven positions — and just briefly helped sell off stocks.
To start this Global Week Ahead, those worry trades have disappeared.
Day traders who want to go short don’t have much to play with. President Trump and President Xi got on well during their first summit, held in Florida.
The two countries agreed to work together -- over the next 100 days -- to reduce the chance of a trade war. China offered better market access for financial sector investments and U.S. beef exports.
Those two trade concessions -- on finance and beef -- are basically already in hand. Had President Obama been in office another six months, China would have raised its investment ceilings in financial services companies anyway. The China ban on U.S. beef exports only goes back to 2003.
On his way, flying back to China, President Xi stopped for a brief photo op/personal experience at Beluga Point on the Turnagain Arm outside of Anchorage, Alaska.
Xi has a learned sense on world history. This is the place where the storied Pacific Ocean explorer, the English Capt. James Cook, hunted for the Northwest Passage to China in the late 18th century.
The biggest macro news this week, surprisingly, likely comes out of Brazil.
On Wednesday, consensus expects Banco Central do Brasil (aka the central bank of Brazil) to cut its SELIC policy rate 100 basis points -- from 12.25% to 11.25%.
If accomplished, this will be the biggest rate decline from a single Brazilian monetary policy decision in the current easing cycle. It will also mark the biggest single meeting decline since June 2009. Further, speaking historically, its size is eclipsed only by a 150 basis point decline seen in April 2009.
Rapidly falling Brazilian inflation is now providing room for easing. Peaking at +10.7% y/y in January 2016, Brazilian inflation now runs under +5% y/y. Risk markets in Brazil have also sharply pared down forward inflation expectations.
Brazil factors as a huge part of any emerging market risk play. Hence, this big a rate cut bodes well for emerging market stock liquidity generally.
Emerging markets stock indexes have been roundly beaten down for years. This big a rate cut --coming from a major player -- could be a compelling upside reversal catalyst.
Top Zacks #1 Rank (STRONG BUY) Stocks—
(1) Roche Holdings AG (RHHBY - Free Report) . This is a French large cap ($217 billion market cap) pharma company. The joined our top list on April 8th.
(2) Adidas AG (ADDYY). This is the big shoe and retail apparel company based in Germany. The stock joined our top list on April 7th.
(3) Deere and Company (DE - Free Report) . This is the big farm equipment manufacturer based in Illinois. The stock joined our top list on April 7th.
Key Global/Macro Events—
On Monday, India is expected to post export growth. Chairwoman Yellen speaks in Michigan.
On Tuesday, the German ZEW indexes are worth paying attention to.
On Friday, don’t expect much from the latest U.S. retail sales data. It will include a weak auto sales number inside it.
Also this week, inflation rates from the U.S. and U.K. will show if the trend of firming consumer prices in those countries has legs.
Stock markets are open on Good Friday. Bond markets close early.
On Monday, India’s exports are poised to lift +22% y/y, versus a prior +17.5% rise.
The Fed’s Bullard speaks in Melbourne and the Fed’s Yellen speaks in Michigan.
On Tuesday, the U.K. CPI rate should be stable at +2.3% y/y, the same as the last reading.
The U.S. NFIB small business optimism index should get to 107 from 105.3. The recent presidential election and rising stock markets has lifted spirits here.
The German ZEW current conditions index should go from 77.3 to 79.2, the economic sentiment index for the Eurozone from 25.6 to 27, and Germany’s economic sentiment from 12.8 to 13.6. All of that is going in the right direction, and spelling more expansion in Europe and Europe’s largest economy.
The Fed’s Kashkari speaks in Minneapolis.
On Wednesday, Brazil’s SELIC monetary policy rate should go to 11.25% from 12.25%. Inflation is finally under some control down there now.
However, Brazil’s retail sales growth should continue to decline, albeit at a lower rate, from -7.0% y/y to -6.5% y/y.
The U.K.’s ILO unemployment rate should be steady at 4.7%.
Mexico’s Banxico posts its latest monetary policy rates.
The Bank of Canada (BoC) should leaves its monetary policy rate at 0.50%.
On Thursday, Australia’s unemployment rate should be stable at 5.9%.
The German HICP inflation rate will come out. The last post was +1.5% y/y.
U.S. initial claims should be low at 234K.
On (Easter’s Good) Friday, the bond market closes early today but the stock market is open.
The U.S. CPI (ex food & energy) and retail sales data come out for the recent month of March.
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Huh? Brazil Matters? Global Week Ahead
In this Global Week Ahead, the first-quarter earnings season launches.
On Thursday, the Q1 earnings season unofficially starts for 2017. A burst of large bank quarterly results come out, including JP Morgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) , Citigroup (C - Free Report) , BlackRock (BLK - Free Report) and PNC Financial (PNC - Free Report) .
Last week, tomahawk missiles fired at Syria, U.S. Navy ships were sent nearer to North Korea, and China’s trade relationship with the U.S. helped push up the value of safe haven positions — and just briefly helped sell off stocks.
To start this Global Week Ahead, those worry trades have disappeared.
Day traders who want to go short don’t have much to play with. President Trump and President Xi got on well during their first summit, held in Florida.
The two countries agreed to work together -- over the next 100 days -- to reduce the chance of a trade war. China offered better market access for financial sector investments and U.S. beef exports.
Those two trade concessions -- on finance and beef -- are basically already in hand. Had President Obama been in office another six months, China would have raised its investment ceilings in financial services companies anyway. The China ban on U.S. beef exports only goes back to 2003.
On his way, flying back to China, President Xi stopped for a brief photo op/personal experience at Beluga Point on the Turnagain Arm outside of Anchorage, Alaska.
Xi has a learned sense on world history. This is the place where the storied Pacific Ocean explorer, the English Capt. James Cook, hunted for the Northwest Passage to China in the late 18th century.
The biggest macro news this week, surprisingly, likely comes out of Brazil.
On Wednesday, consensus expects Banco Central do Brasil (aka the central bank of Brazil) to cut its SELIC policy rate 100 basis points -- from 12.25% to 11.25%.
If accomplished, this will be the biggest rate decline from a single Brazilian monetary policy decision in the current easing cycle. It will also mark the biggest single meeting decline since June 2009. Further, speaking historically, its size is eclipsed only by a 150 basis point decline seen in April 2009.
Rapidly falling Brazilian inflation is now providing room for easing. Peaking at +10.7% y/y in January 2016, Brazilian inflation now runs under +5% y/y. Risk markets in Brazil have also sharply pared down forward inflation expectations.
Brazil factors as a huge part of any emerging market risk play. Hence, this big a rate cut bodes well for emerging market stock liquidity generally.
Emerging markets stock indexes have been roundly beaten down for years. This big a rate cut --coming from a major player -- could be a compelling upside reversal catalyst.
Top Zacks #1 Rank (STRONG BUY) Stocks—
(1) Roche Holdings AG (RHHBY - Free Report) . This is a French large cap ($217 billion market cap) pharma company. The joined our top list on April 8th.
(2) Adidas AG (ADDYY). This is the big shoe and retail apparel company based in Germany. The stock joined our top list on April 7th.
(3) Deere and Company (DE - Free Report) . This is the big farm equipment manufacturer based in Illinois. The stock joined our top list on April 7th.
Key Global/Macro Events—
On Monday, India is expected to post export growth. Chairwoman Yellen speaks in Michigan.
On Tuesday, the German ZEW indexes are worth paying attention to.
On Friday, don’t expect much from the latest U.S. retail sales data. It will include a weak auto sales number inside it.
Also this week, inflation rates from the U.S. and U.K. will show if the trend of firming consumer prices in those countries has legs.
Stock markets are open on Good Friday. Bond markets close early.
On Monday, India’s exports are poised to lift +22% y/y, versus a prior +17.5% rise.
The Fed’s Bullard speaks in Melbourne and the Fed’s Yellen speaks in Michigan.
On Tuesday, the U.K. CPI rate should be stable at +2.3% y/y, the same as the last reading.
The U.S. NFIB small business optimism index should get to 107 from 105.3. The recent presidential election and rising stock markets has lifted spirits here.
The German ZEW current conditions index should go from 77.3 to 79.2, the economic sentiment index for the Eurozone from 25.6 to 27, and Germany’s economic sentiment from 12.8 to 13.6. All of that is going in the right direction, and spelling more expansion in Europe and Europe’s largest economy.
The Fed’s Kashkari speaks in Minneapolis.
On Wednesday, Brazil’s SELIC monetary policy rate should go to 11.25% from 12.25%. Inflation is finally under some control down there now.
However, Brazil’s retail sales growth should continue to decline, albeit at a lower rate, from -7.0% y/y to -6.5% y/y.
The U.K.’s ILO unemployment rate should be steady at 4.7%.
Mexico’s Banxico posts its latest monetary policy rates.
The Bank of Canada (BoC) should leaves its monetary policy rate at 0.50%.
On Thursday, Australia’s unemployment rate should be stable at 5.9%.
The German HICP inflation rate will come out. The last post was +1.5% y/y.
U.S. initial claims should be low at 234K.
On (Easter’s Good) Friday, the bond market closes early today but the stock market is open.
The U.S. CPI (ex food & energy) and retail sales data come out for the recent month of March.