Opposite directions in US and European markets; balance sheets and macroeconomic data in focus

Barcelona, ​​Spain – US futures indices were in the red this morning, in the opposite direction from European equities. In addition to the battery of macroeconomic data and balance sheets, it affects the negotiation process China’s promise to boost economic stimuluswhich helps restore confidence in the world’s second largest economy and increase demand for raw materials.

China’s leaders therefore vowed to boost economic stimulus to stimulate growth and vowed to contain the worst Covid epidemic since 2020, which threatens official targets for this year.

Among US index contracts, the Nasdaq futures were the worst this morning, if you can count. declining profits of companies like Amazon. Tesla rose 4.2% in pre-market trading after Elon Musk said it would not sell any more shares. In Europe, the rising Stoxx Europe 600 index was supported by the mining sector.

Disappointment of some tech giants aside, the busy profit period that is still going on has gone a long way in reducing losses in a turbulent year. About 86% of the companies that form S&P are making plans, according to Bloombergquoting Barclays’ strategists.

Treasury securities lost nominal value and 10-year bond premium rose to 2.85%. In foreign exchange markets, the yen stopped a series of depreciations when it hovered around a 20-year low. The euro, the pound sterling and commodity-denominated currencies rose while the dollar fell.

Meanwhile, oil prices rose, with West Texas Intermediate futures close to $ 106 a barrel on Friday. The commodity is aiming for the highest monthly profit since the beginning of 2018.

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Beware of GDP

After being surprised by the United States’ gross domestic product (GDP), today it was Europe’s turn to show the temperature of its economies. Data on mainland consumer inflation are also on the agenda, along with the balance sheets of companies in all markets.

The United States announced yesterday that its economy contracted by 1.4% in the first quarter of 2021. This is the first reduction since 2020. Analysts had expected that the wealth produced in the country would continue to increase, by 1%, although much less than + 6.9% in the fourth quarter.

🇪🇺 Europe’s largest economies have started in 2022 with weak performance, underscoring the damage caused by rising energy costs and commodity supply problems following Russia’s invasion of Ukraine.

Germany narrowly avoided a recession: The economy grew by only 0.2% in the first quarter. In France, GDP remained stable after growing by 0.8% in the last three months of 2021. The Italian economy contracted 0.2%, effect on energy costs. The Spaniards have slowed down more than expected (for + 0.3% from January to March this year, from + 2.2% in the fourth quarter of 2021).

🔵 Yet despite all the background uncertainty, Europe’s GDP in the first quarter increased by + 5.0% year-on-year, in line with analysts’ expectations, and just over + 4.7% previously reported..

Inflation in Europe. Hitting the roof?

Inflation is glowing red, although the market is already suspecting that inflation in Europe is peaking. The euro area consumer price index remained almost stable in April, + 7.5%, which is a record, compared with + 7.4% in the previous month. But inflation in France rose unexpectedly in April to 5.4%, the highest since the introduction of the euro and higher than economists had expected.

🔦 Balance sheets in the spotlight

The financial health of companies will also drive business today. This morning, investors echoed the balance sheets of Apple and Amazon, which were published after the stock markets closed. The manufacturer beat the plan in the first quarter thanks to high demand for iPhone and services. However, Amazon lost, the first since 2015, and assume slower growth.

🟢 The bags yesterday: Dow Jones (+ 1.85%), S&P 500 (+ 2.47%), Nasdaq Composite (+ 3.06%), Stoxx 600 (+ 0.62%)

US equities were boosted by strong quarterly results, even after an unexpected contraction in GDP in the first quarter of the year. Stock markets supported data from the US economy, which contracted unexpectedly in the last quarter for the first time since 2020. Gross domestic product fell by 1.4% year-on-year, after growing by 6.9% at the end of 2021.

Investors’ agenda

These are the events scheduled for today:

• Festive in Japan

• EE.UU.: PCE / Mar price index; Personal income and expenses / Sea; Actual private consumption / sea; Chicago PMI / April; Michigan Inflation Expectations / April; University of Michigan Consumer Confidence / April; Personal Expenditure (PCE) – Dallas Fed./mar

• Europe: Eurozone (CPI / April; GDP / 1Q22; Money supply – Total M3 / Mar; Private sector loans); Germany (GDP / 1F22; Prices of imported goods / Sea); France (CPI; PPI; Consumption / Sea; GDP / 1Q22); United Kingdom (National Housing Index / April; BoE Consumer Credit / March; Mortgage Approval / March); Spain (GDP / 1F22; Retail / March); Italy (GDP / 1F22; PPI / Sea), Portugal (CPI / APR)

• Asia: China (PMI Composite / April)

• Latin America: Brazil (IBC-Br; Bank loans / Feb; Unemployment rate; Fiscal balance / Feb; Current trade / Feb; Foreign direct investment; Net debt / GDP / Feb); Mexico (GDP)

• Status of the day: Bank of China, Exxon Mobil, Orsted, Chevron, AbbVie, Bristol-Myers Squibb, AstraZeneca, Honeywell, DBS, Colgate-Palmolive, Eni, Neste Oyj, BBVA, NIO, CaixaBank, NatWest, Nutresa, Itaú CorpBanca, Celulose Irani

📌 And before Monday, May 2:

• Festive: China, Hong Kong, UK• PMI indicators: United States, Canada, Eurozone, Germany, France, Spain, Italy, Brazil, Mexico• EE.UU.: ISM prices in the manufacturing sector / April; ISM Manufacturing Employment Index / April; Expenditure on construction / sea; Fed survey of major credit banks

• Europe: Eurozone (corporate and consumer confidence / April; business climate / April; consumer inflation expectations / April); Germany (retail / sea)

• Asia: Japan (Home Confidence Index / April)

• Latin America: Brazil (Focus Bulletin; Current account / April); Argentina (tax revenue)

– With information from Bloomberg