European and American indices ended higher yesterday, while worries about the consequences of rising inflation around the world on company earnings and growth forecasts remain elevated. The S&P 500 is presently down around 17% from its all-time high, and the Dow is down roughly 14%, while the Nasdaq is already in bear market territory, having lost 29% from its latest highest level.
Analysts say it’s unclear how long global indices can maintain their current levels after this minor rebound. Investors have been in this situation before, enjoying minor relief rallies throughout this year’s upheaval and uncertainty, but unsure whether the rebound will be significant enough to reverse the downtrend.
Elsewhere, the Australian index barely reacted to the election results. After almost ten years of conservative administration, Anthony Albanese (Labor Party) has been elected to become the 31st Prime Minister.
However, time is still needed to await additional results (postal votes) in order to determine if the party can form a majority government. While 76 of the 151 seats in the House of Representatives are required to have a clear majority, Labor only has 73 seats so far.
Key figures from Monday’s trading session:
- CAC 40 = +1.17%
- DAX 40 = +1.38%
- EUROSTOXX 50 = +1.40%
- Dow Jones = +1.98%
- Nasdaq = +1.59%
- S&P 500 = +1.86%
- Oil = around $113 a barrel
- Gold = around $1,856 per ounce
- EUR/USD = around 1.0690
- GBP/USD = around 1.2579
- AUD/USD = around 0.7102
- USD/JPY = around 127.84
- USD/CAD = around 1.2780
- Bitcoin = around $29,000
- Ethereum = around $1,985
Key facts from Monday’s trading session:
- After McDonald’s, Starbucks will close its stores in Russia for good. How many other multinationals will follow? How will this decision impact their share prices?
- IMF Managing Director, Kristalina Georgieva, declared that the global economy faces its “biggest test since the Second World War.”
- The S&P 500 briefly entered a bear market.
- The Nasdaq and the S&P 500 recorded their 7th straight week of losses last week (the 8th for the Dow Jones).
- The GBP is hovering around its two-week highs against the USD.
- RUB is heading back towards multi-year highs against the EUR and the USD.
- EUR strengthened as the President of the ECB, Christine Lagarde, pointed to rate hikes by September. The single currency hit its highest level since April.
- JP Morgan cut its growth forecast for China to 3.7% from 4.3%.
What else should you monitor this week?
On Tuesday
- United Kingdom – BoE Gov Bailey Speaks
- New Zealand – Retail Sales (Q1)
- Australia – RBA Assist Gov Kent Speaks
- USA – FOMC Member George Speaks
- Japan – Services PMI (May)
- Europe – Manufacturing & Services PMI + Markit Composite PMI (May)
- United Kingdom – Composite & Manufacturing & Service PMI
- United Kingdom – BoE Deputy Governor Woods Speaks
- Canada – Manufacturing & Wholesale Sales
- USA – Manufacturing & Services PMI + Markit Composite PMI (May)
On Wednesday
- World Economic Forum Annual Meetings
- USA – New Home Sales (Apr)
- USA – Fed Chair Powell Speaks
- United Kingdom – MPC Member Tenreyro Speaks
- Europe – ECB President Lagarde Speaks
- Australia – RBA Assist Gov Ellis Speaks
- Australia – Construction Work Done (Q1)
- New Zealand – RBNZ Interest Rate Decision + Monetary Policy Statement + Rate Statement + Press Conference
- Japan – BoJ Governor Kuroda Speaks
- Europe – ECB’s Panetta, Lane and Lagarde Speaks
- Europe – ECB Financial Stability Review
- USA – Durable Goods Orders (Apr)
On Thursday
- World Economic Forum Annual Meetings
- USA – Crude Oil Inventories
- USA – FOMC Member Brainard Speaks
- USA – FOMC Meeting Minutes
- Australia – Private New Capital Expenditure (Q1)
- USA – GDP (Q1)
- USA – GDP Price Index (Q1)
- USA – Initial Jobless Claims
- Canada – Retail Sales (Mar)
On Friday
- USA – Pending Home Sales (Apr)
- Japan – Tokyo Core CPI (May)
- Australia – Retail Sales (Apr)
- USA – FOMC Member Bullard Speaks
- Europe – ECB Lane Speaks
- USA – Goods Trade Balance (Apr)
- USA – PCE price index (Apr)
- USA – Personal Spending (Apr)
- USA – Retail Inventories Ex Auto (Apr)
