In the following week of April, investors' attention may be drawn to PMIs readings for April, which may be worse than in March due to further restrictions in individual countries. In addition to PMI, investors could wait for information related to the plan to restart the European and American economy and the implementation of this plan. Furthermore, more information on potential COVID-19 treatment or coronavirus vaccine may appear.
Financial markets still seem to be very optimistic because of the huge injection of cheap money that flows to the financial sector, entrepreneurs and citizens. However, it should be remembered that it is still a matter of keeping companies on the market, because the number of unemployed in the US has reached 20 million, and it is only in a month. Next Thursday data on jobless claims may again attract the attention of investors. However, this time the reading may decrease to approx. 3-4 million. As a result, the US unemployment rate can reach or even exceed 15 percent in just 2 months.
For the euro area, in addition to the Thursday PMI reading (23 April at 10:00), attention should also be paid to the Eurogroup meeting, which will be a continuation of the discussion on the European Union's common fund to accelerate economic recovery. An important topic of the meeting will be the issue of financing debt in the form of a coronabonds. No agreement was reached before on this matter, but if a compromise could now be reached, it would be a very big surprise.
On the other hand, for the New York Stock Exchange, the crucial could be the continuations of the earnings season. The first-quarter results will be presented by, among others IBM, Coca-Cola, Netflix or Intel. Currently, it is quite easy to observe divergences between the S&P 500, DJIA and Nasdaq 100 indices. The last seems to have the best chance of returning to the high preceding the epidemic.
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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