This week, investors' attention may be mainly focused on the Federal Reserve's decision on interest rates, the publication of the release for the decision and from Fed Chief Jerome Powell's press conference. Wall Street, in turn, will be able to react to the publication of results of technology giants.
U.S. stock futures were little changed Monday following Friday's session highs.
A week of important data
From the point of view of investors on Wall Street, the publication of quarterly results of most of the FAANG companies and other technology giants may be crucial this week. In the coming days, Facebook, Apple, Google, Microsoft, Amazon and Tesla are expected to present their results.
The Federal Reserve meeting and fresh inflation data will also be in a center of attention. Markets came under pressure last week when multiple media outlets reported that President Joe Biden would seek to raise capital gains taxes for wealthy Americans. The President is expected to unveil this plan to a joint session of Congress on Wednesday.
In Europe, on the other hand, we may see a slight pullback in stock market indices. It seems that automakers may have suffered the most at the beginning of the week. The Financial Times reported that Volkswagen warned managers to prepare for a bigger drop in production in the second quarter due to an ongoing materials shortage.
The rising number of COVID-19 cases in some parts of the world has at the same time increased concerns about the scale of the recovery. Investors also await a series of economic data, including German business confidence figures today and GDP data for Europe and the U.S. later in the week.
The situation in India raises concerns about fuel demand
In the oil market, we may also see concerns about the impact of the outbreak on global economic growth in the coming quarters. Oil prices fell 1 percent on Monday, with WTI now costing $61.43 per barrel.
The surge in COVID-19 cases in Asia appears to have led to concerns that the recovery in fuel demand could be hampered. In India, 352,991 new cases of the virus were reported on Monday, marking the fifth consecutive record day. The rise in cases is overwhelming the health system there.
In Japan, the world's fourth-largest oil buyer, a third state of emergency began Sunday in Tokyo, Osaka and two other prefectures. It affects nearly a quarter of the country's population. At the same time, Reuters reported that traders adjusted positions ahead of OPEC+ planned increase in oil production from May.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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