European Equities: A Week in Review – 13/05/22

The Majors

It was a bullish week for the European majors in the week ending May-13, 2022.

The DAX rallied by 2.59%, with the EuroStoxx600 and the CAC40 seeing gains of 0.83% and 1.67%, respectively. A Friday Fed Chair Powell induced rally pulled the CAC40 and the EuroStoxx600 into positive territory for the week.

A quiet economic calendar left the markets to consider the impact of persistent inflationary pressure, China’s lockdown measures, and the war in Ukraine on the economic outlook.

While US inflationary pressures softened in April, fears of a global recession spiked in the week. Adding to the market angst were concerns about a more aggressive Fed rate path to policy normalization.

The negative sentiment hit the global financial markets, with the European majors unable to avoid the fallout.

With the war in Ukraine showing no signs of ending and China grappling with the latest COVID-19 breakout, conditions could worsen.

Amidst recession fears, Fed Chair Powell delivered much-needed market support on Friday, however. The Fed Chair assured the markets that larger rate hikes remained off the table despite the latest US inflation numbers. For the DAX, it was the first weekly rise in six weeks.

The Stats

ZEW Economic Sentiment figures for Germany and the Eurozone and Eurozone industrial production figures were the key stats.

In May, economic sentiment improved, with Germany’s ZEW Economic Sentiment Index up from -41.0 to -34.3. The Eurozone’s ZEW Economic Sentiment Index climbed from -43.0 to -29.5.

At the end of the week, industrial production disappointed, however.

In March, industrial production fell by 1.8%. Production rose by a modest 0.5% in February.

From the US

Inflation was back in focus, which caused market turbulence mid-week.

In April, the annual rate of inflation softened from 8.5% to 8.3% versus a forecasted 8.1%. The core annual rate of inflation softened from 6.5% to 6.2%. While softer, inflation was stronger than anticipated, supporting the more hawkish sentiment towards Fed monetary policy.

On Thursday, wholesale inflation also drew attention. In the month of April, the core producer price index increased by 0.4% after a 1.2% rise in March.

Initial jobless claims had a muted impact despite a rise from 202k to 203k in the week ending May-06.

On the monetary policy front, Fed Chair Powell calmed the markets on Friday, assuring that larger rate hikes would remain off the table.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental rallied by 8.22%, with Daimler gaining 3.25%. BMW and Volkswagen saw losses of 1.77% and 1.14%, respectively.

It was a bullish week for the banking sector. Deutsche Bank rose by 0.34%. with Commerzbank ending the week up by 5.07%.

From the CAC, it was also a bullish week for the French banks. BNP Paribas rallied by 3.54%, with Credit Agricole and Soc Gen rising by 3.21% and 3.41%, respectively.

The French auto sector had a bullish week. Stellantis NV rallied by 4.88%, with Renault up 1.86%.

Air France-KLM fell by 1.62%, with Airbus ending the week down 1.06%.

On the VIX Index

In the week ending May-13, the VIX fell for a second consecutive week. The VIX had risen for four consecutive weeks ahead of the current downtrend.

Following a 9.61% decline from the previous week, the VIX fell by 4.37% to end the week at 28.87.

4-days in the red from 5 sessions, which included a 9.13% slide on Friday, delivered the downside.

For the week, the NASDAQ slid by 2.80%, with the Dow and the S&P500 seeing losses of 2.14% and 2.41%, respectively.

VIX 130522 Weekly Chart

The Week Ahead

It is a quiet week ahead on the Eurozone economic calendar.

Eurozone trade, GDP, and inflation figures are due out. Expect any revisions from the first estimate GDP and any upward revisions to prelim inflation figures to draw interest.

It is a busy week ahead on the US economic calendar.

On Tuesday, retail sales figures will be key ahead of jobless claims and Philly Fed Manufacturing Index numbers on Thursday.

While stats from the Eurozone and the US will influence, economic data and news updates from China will also need considering.

On Monday, industrial production figures for April set the tone. The markets will be looking out for updates on new lockdown measures.

Away from the economic calendar, updates on the war in Ukraine and crude oil prices will also influence.

Bank Stocks Deliver Early FTSE100 Support While Mining Stocks Struggle

It was a quiet start to the day for the UK market. There were UK stats for the markets to consider going into the UK open.

The lack of stats left the FTSE100 in the hands of market risk appetite and sentiment towards inflation.

Following Monday’s global equity market rout, hopes are for softer US inflation in April. Market angst over supply chain disruption stemming from the war in Ukraine and China’s COVID-19 lockdown measures lingered, however.

Market Impact

At the time of writing, the FTSE100 was up 0.58% to 7,258.39.

Anglo American (-0.46%) and Glencore (-0.93%) struggled early in the session, while Antofagasta (+0.39%) and Rio Tinto (+0.09%) made modest gains.

Bank stocks delivered support. Barclays (+1.28%), HSBC (+1.25%), Lloyds (+2.01%), and Standard Chartered (+2.23%) all made a strong start to the session.

The Pound remained on the back foot this morning despite a bullish start to the day for the European equity markets.

At the time of writing, the Pound was down 0.19% to $1.23072. Early in the session, the Pound rose to a morning high of $1.23757 before falling to a low of $1.23039.

Cable 100522 Hourly Chart

The UK markets will need to look ahead to UK GDP and manufacturing production figures on Thursday for direction. It may all boil down to US inflation figures on Wednesday, however.

European Equities: A Week in Review – 06/05/22

The Majors

It was a bearish week for the European majors in the week ending May-06, 2022.

The DAX fell by 3.00%, with the EuroStoxx600 and the CAC40 seeing losses of 4.55% and 4.21%, respectively.

Disappointing economic data coupled with market angst over inflation and Fed monetary policy left the majors deep in the red.

The global financial markets brushed aside Fed Chair Powell’s attempts to ease concerns of more aggressive policy moves. Lockdown measures in China and the ongoing war in Ukraine continue to disrupt supply chains, pushing oil prices northwards.

The upward trend in crude oil prices and supply chain woes were market negative.

The Stats

The German economy and private sector PMIs were the areas of focus.

It was a mixed set of numbers, with economic data from Germany disappointing.

In March, German retail sales unexpectedly fell by 0.1% versus a forecasted 0.3% increase. Unemployment also fell more slowly, leaving the German unemployment rate at 5.0%.

Trade, factory orders, and industrial production figures also sounded the alarm bells.

Germany’s trade surplus narrowed from €11.1bn to €3.2bn, with factory orders tumbling by 4.7%.

Industrial production was not much better, sliding by 3.9%, to reflect the impact of the war in Ukraine and lockdown measures in China.

Private sector PMIs were also negative, with the Eurozone’s manufacturing PMI falling to a 15-month low of 55.5. Easing lockdown measures provided some relief, with the Eurozone services PMI rising from 55.6 to 57.7 in April.

From the US

Private sector PMIs were the key stats in the week ahead of nonfarm payroll numbers on Friday.

The numbers were mixed, with private sector PMI figures disappointing.

In April, the ISM Manufacturing PMI fell from 57.1 to 55.4, with the Non-Manufacturing PMI down from 58.3 to 57.1.

Labor market numbers were also dollar negative ahead of the NFP numbers. The ADP reported a 247k increase in nonfarm payrolls for April, falling short of forecasts, and a 479k rise in March.

For the week ending April 29, initial jobless claims increased from 181k to 200k.

On Friday, the stats were market neutral. Nonfarm payrolls increased by 428k in April, following a 428k rise in March. As a result, the US unemployment rate held steady at 3.6%.

While the stats were of interest, the Fed monetary policy decision and forward guidance were the key drivers in the week.

On Wednesday, the Fed delivered a 50 basis point rate hike, which was in line with forecasts. Fed Chair Powell also looked to calm the markets by assuring that 75 basis point hikes would not be on the table.

Relief was brief, with jitters over inflation and Fed policy returning in the second half of the week.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Daimler and Continental tumbled by 7.48% and 7.12%, respectively, with Volkswagen falling by 2.00%. BMW bucked the trend with a 0.70% gain.

It was a bearish week for the banking sector. Deutsche Bank and Commerzbank saw losses of 3.23% and 2.55%, respectively.

From the CAC, it was a mixed week for the banks. BNP Paribas rose by 1.77%, while Credit Agricole and Soc Gen ended the week down by 3.95% and 2.59%, respectively.

It was another mixed week for the French auto sector. Stellantis NV rose by 1.25%, while Renault fell by 1.74%.

Air France-KLM slipped by 0.08%, while Airbus ended the week up 1.86%.

On the VIX Index

A run of four consecutive weeks in the green came to an end for the VIX in the week ending May-06.

Partially reversing an 18.40% jump from the previous week, the VIX fell by 9.61% to end the week at 30.19.

4-days in the red from 5 sessions, which included a 13.09% slide on Wednesday, delivered the downside.

For the week, the NASDAQ fell by 1.54%, with the Dow and the S&P500 seeing losses of 0.24% and 0.21%, respectively.

VIX 060522 Weekly Chart

The Week Ahead

It is a busy week ahead on the Eurozone economic calendar.

ZEW Economic Sentiment figures for Germany and the Eurozone are due on Tuesday.

On Friday, Eurozone industrial production numbers will also influence.

Other stats in the week include finalized member state inflation figures for May that should have a muted impact on the majors.

From the US, inflation is back in the spotlight, with consumer and wholesale inflation figures due out on Wednesday and Thursday.

Another spike in inflation would test support for riskier assets following Fed forward guidance last week.

On Thursday, initial jobless claims will also draw interest ahead of consumer sentiment figures on Friday.

Economic data and updates on lockdown measures from China will also provide direction. Key stats include trade data and inflation figures.

While the stats will influence, news updates on the war in Ukraine and central bank chatter will also need monitoring.

European Equities: A Week in Review – 29/04/22

The Majors

It was a bearish week for the European majors in the week ending April-29, 2022.

The CAC40 fell by 0.73%, with the EuroStoxx600 and the DAX seeing losses of 0.64% and 0.31%, respectively.

After a bearish start to the week, corporate earnings supported riskier assets in the week. The upside was modest, however, with market sentiment towards the global economy and Fed monetary policy weighing heavily on risk sentiment.

On Friday, the Financial Times reported China’s politburo “promising to strengthen macro adjustments and achieve full-year economic and social development goals.”

China’s pledge to support the economy also delivered the European majors with support.

While the weekly losses were modest, it was a bearish month, with the DAX sliding by 2.20% and the CAC and EuroStoxx600 falling by 1.90% and 1.20%, respectively.

China’s COVID-19 lockdown measures and the ongoing war in Ukraine raised further concerns over supply chain disruption. Fed Chair Powell’s talk of aggressive policy moves to curb inflation and jitters over the threat of a recession were also market negative in the month.

The Stats

Early in the week, German business and consumer sentiment diverged. While business sentiment improved, consumer sentiment weakened further.

The Ifo Business Climate Index increased from 90.8 to 91.8 in April, while the Gfk German Consumer Climate Index fell from -15.7 to -26.5.

In the second half of the week, the market focus shifted to inflation and economic growth.

The stats were market positive, with German and the Eurozone GDP numbers for the first quarter providing support.

In Q1 2022, the German economy expanded by 4.0% year on year, up from 1.8% in the previous quarter.

The Eurozone’s economy grew by 5.0% year on year, up from 4.6% in the quarter prior.

On the inflation front, inflationary pressures ticked up further, though only moderately. According to prelim figures, the Eurozone’s annual rate of inflation picked up from 7.4% to 7.5%.

From the US

Core durable goods orders and consumer sentiment drew interest on Tuesday. The stats were market positive, with core durable goods orders rising by 1.1% in March.

Consumer sentiment held steady in April, which was also market positive. The CB Consumer Confidence Index slipped from 107.6 to 107.3.

On Thursday, US GDP numbers disappointed, however, with the US economy contracting by 1.4%. In the previous quarter, the economy expanded by 6.9%.

At the end of the week, inflation and personal spending were market positive. Personal spending rose by 1.1% in March, while inflationary pressures softened. In March, the Core PCE Price Index increased by 5.2% year on year, down from 5.3% in February.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Daimler rallied by 3.66%, with Continental gaining 0.64%. Volkswagen slid by 2.43%, however, with BMW ending the week flat.

It was a bearish week for the banking sector. Deutsche Bank tumbled by 12.68%, with Commerzbank sliding by 7.65%.

From the CAC, it was a bearish week for the banks. BNP Paribas and Soc Gen saw losses of 3.90% and 3.66%, respectively, with Credit Agricole falling by 1.05%.

It was another mixed week for the French auto sector. Stellantis NV slipped by 0.37%, while Renault ended the week up 1.59%.

Air France-KLM slid by 4.24%, while Airbus ended the week with a 0.84% gain.

On the VIX Index

It was a fourth consecutive week in the green for the VIX in the week ending April-29.

Following a 24.27% surge from the previous week, the VIX jumped by 18.40% to end the week at 33.40.

2-days in the green from 5 sessions, which included a 24.06% surge on Tuesday and an 11.37% jump on Friday, delivered the upside.

In the week, the NASDAQ slumped by 3.93%, with the Dow and the S&P500 sliding by 2.47% and 3.27%, respectively.

VIX 290422 Weekly Chart

The Week Ahead

It is a busy week ahead on the Eurozone economic calendar.

On Monday, manufacturing PMIs and German retail sales will draw interest ahead of German unemployment figures on Tuesday.

On Wednesday, the market attention will shift to service sector PMIs, German trade data, and Eurozone retail sales.

Over the remainder of the week, the German economy will remain in the spotlight. On Thursday, German factory orders are due out ahead of industrial production figures on Friday.

From the US, it is a big week ahead. On the economic data front, ISM survey PMIs will influence this Monday and Wednesday, with Wednesday’s ISM Non-Manufacturing PMI the main driver.

The US labor market will also be in focus, with the ADP nonfarm employment change figures and official nonfarm numbers due out on Wednesday and Friday.

The main event of the week, however, is the FED’s monetary policy decision. A larger than expected rate hike will spook the markets.

Away from the economic calendar, corporate earnings will continue to provide direction. The majors could be in for a tough time following Amazon.com’s earnings after the European close on Friday.

News updates on the war in Ukraine will also need monitoring throughout the week.

European Equities: A Week in Review – 22/04/22

The Majors

It was a mixed week for the European majors in the week ending April-22, 2022.

The EuroStoxx600 slid by 1.42%, with the CAC40 and the DAX seeing losses of 0.12% and 0.15%, respectively.

Stats from China at the start of the week set the tone, leaving the majors in the red after the Monday holidays.

In Q1, the economy grew by 1.3%, which was softer than 1.5% in Q2. Year-on-year, the economy grew by 4.8%, picking up from 4.0% in the quarter prior.

The downward trend in industrial production continued with production up by 5.0% year-on-year. In February, industrial production increased by 7.5%.

Fed Chair Powell chatter drove Treasury yields northwards to leave the majors searching for support on Friday.

Economic data from the Eurozone was relatively upbeat but not good enough to offset concerns over supply chain disruption.

The ongoing war in Ukraine and China’s introduction of new COVID-19 restrictions added to the market angst.

The Stats

Early in the week, the Eurozone economy was in the spotlight.

The stats were market positive, though not good enough to counter hawkish Fed Chair Powell chatter from later in the week.

In February, industrial production rose by 0.7%, reversing a 0.7% decline from January. Trade data was also positive, with the trade deficit narrowing from €27.3bn to €7.6bn.

Consumer confidence was also on the rise, despite the ongoing war in Ukraine.

At the end of the week, prelim private sector PMIs for April disappointed. Germany’s manufacturing PMI declined from 56.9 to 54.1, leaving the Eurozone Manufacturing PMI down from 56.5 to a 15-month low of 55.3.

Service sector activity accelerated due to easing COVID-19 restrictions, supporting a rise in the composite PMI from 54.9 to 55.8.

From the U.S

It was a quiet start to the week, with the markets needing to wait until Thursday for the key numbers.

It was a mixed set of numbers. Jobless claims fell from 186k to 184k in the week ending April 15. The Philly Fed Manufacturing Index disappointed, however, falling from 27.4 to 17.6.

On Friday, prelim private sector PMIs for April also drew interest.

The Manufacturing PMI increased from 58.8 to 59.7, while the Services PMI declined from 58.0 to 54.7.

The mixed set of numbers came amidst some hawkish Fed Chair Powell chatter.

On Thursday, Fed Chair Powell spoke at the Annual Economic Policy Conference National Association for Business Economics.

There were two key takeaways from the Powell speech. Firstly, the prospect of a fifty-basis point rate hike.

Discussing restoring price stability, Powell said,

“If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or in meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

Secondly, Powell talked of the challenges of bringing down inflation without bringing down the economy.

Concerning growth, Powell said,

“I hasten to add that no one expects that bringing about a soft landing will be straightforward in the current context – very little is straightforward in the current context. My colleagues and I will do our very best to succeed in this challenging task.”

The combination of a more rapid move to policy-neutral and possible beyond and the threat of recession weighed on riskier assets.

The Market Movers

From the DAX, it was a bullish week for the auto sector. BMW and Continental rallied by 2.99% and 3.31%, respectively. Daimler and Volkswagen ended the week with gains of 2.23% and 2.39%, respectively.

It was also a bullish week for the banking sector. Deutsche Bank rose by 0.44%, with Commerzbank rallying by 5.10%.

From the CAC, it was another bullish week for the banks. BNP Paribas rose by 4.48%, with Credit Agricole and Soc Gen seeing gains of 5.11% and 5.21%, respectively.

It was a mixed week for the French auto sector. Stellantis NV slid by 6.54%, while Renault ended the week up 4.41%.

Air France-KLM gained 0.49%, while Airbus ended the week with a 1.38% loss.

On the VIX Index

It was a third consecutive week in the green for the VIX in the week ending April-22.

Following a 7.28% gain from the previous week, the VIX jumped by 24.27% to end the week at 22.70.

2-days in the green from 5 sessions, which included an 11.61% rise on Thursday and a 24.38% surge on Friday delivered the upside.

In the week, the NASDAQ slumped by 3.83%, with the Dow and the S&P500 falling by 1.86% and 2.75%, respectively.

The Week Ahead

It is a quieter week ahead on the Eurozone economic calendar.

At the start of the week, German business sentiment will provide direction. Expect another slide to test support for the majors.

On Wednesday, German consumer sentiment figures will also influence ahead of Q1 GDP numbers on Friday.

GDP numbers from France, Germany, and Spain will be key at the end of the week.

From the U.S, Core durable goods and consumer confidence figures will draw attention on Tuesday. Expect consumer confidence to have a greater influence.

On Thursday, the market focus will shift to Q1 GDP and weekly jobless claims. Barring a spike in jobless claims, the GDP numbers will be key.

At the end of the week, inflation and personal spending will wrap up the week.

From China, expect private sector PMIs to also influence at the end of the week.

Away from the economic calendar, corporate earnings and the war in Ukraine will continue to provide direction.

European Equities: A Week in Review – 15/04/22

The Majors

It was a mixed week for the European majors in the week ending April-15, 2022.

The CAC40 rose by 0.63%, while the DAX and the EuroStoxx600 saw losses of 0.84% and 0.25%, respectively.

A marked shift in central bank monetary policy and forward guidance, coupled with intensifying supply chain disruption weighed on riskier assets.

With U.S inflation hitting a 4 decade high and the war in Ukraine showing no signs of ending, fears of a continued rise in commodities, factory gate prices, and consumer prices were market negative.

An extended war in Ukraine would force central banks to take more aggressive measures to curb inflation, which could adversely affect the global economy.

The Stats

It was a quieter week, with the markets focused on economic sentiment and ECB monetary policy.

Economic sentiment figures for Germany and the Eurozone weakened further. In April, Germany’s ZEW Economic Sentiment Index slipped from -39.3 to -41.0, with the Eurozone’s falling from -38.7 to -43.0.

While inflation expectations softened, limiting the damage, fears of stagflation and the war in Ukraine weighed on sentiment.

Other stats in the week included finalized inflation figures for member states that had a muted impact on the EUR and European bourses.

On the monetary policy front, the ECB left the deposit and cash rates unchanged on Thursday. For the European majors, the more cautious stance was market positive.

Unlike other central banks, the ECB left interest rates unchanged and talked of downside risks to the economy stemming from the war in Ukraine.

From the U.S

At the start of the week, inflation was back in focus, with the U.S annual rate of inflation accelerating from 7.9% to 8.5%. In March, the core annual rate of inflation picked up from 6.4% to 6.5%.

On Thursday, the market focus shifted to retail sales, jobless claims, and consumer sentiment.

In March, retail sales increased by 0.5%, with core retail sales rising by 1.10%. Economists had forecast increases of 0.6% and 1.0%, respectively.

Jobless claims held below the 200k level. In the week ending April-08, jobless claims increased from 167k to 185k.

While of less influence, consumer sentiment also drew interest amidst the shift in FED policy forced by the surge in consumer prices.

In April, the Michigan Consumer Sentiment Index jumped from 59.4 to 65.7.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Volkswagen and Continental slid by 2.65% and 1.61%, respectively, with BMW falling by 0.99%. Daimler ended the week with a modest 0.16% gain.

It was a mixed week for the banking sector. Deutsche Bank tumbled by 7.33%, with Commerzbank falling by 6.91%.

From the CAC, it was a bullish week for the banks. Soc Gen rallied by 4.57%, with Credit Agricole and BNP Paribas rising by 0.91% and 3.47%, respectively.

Things were also bullish for the French auto sector. Stellantis NV and Renault ended the week up 1.28% and 1.74%, respectively.

Air France-KLM and Airbus saw gains of 3.63% and 2.63%, respectively.

On the VIX Index

It was a second consecutive week in the green for the VIX in the week ending April-15.

Following a 7.79% gain from the previous week, the VIX rose by 7.28% to end the week at 22.70.

2-days in the green from 4 sessions, which included a 15.2% jump on Monday, delivered the upside.

In the week, the Dow fell by 0.78%, with the NASDAQ and the S&P500 sliding by 2.63% and 2.13%, respectively.

VIX 150422 Weekly Chart

The Week Ahead

It is another busy week ahead on the Eurozone economic calendar.

Mid-week, Eurozone trade, and industrial production figures will draw interest ahead of finalized inflation figures on Thursday.

On Friday, prelim private sector PMIs for France, Germany, and the Eurozone will be the key stats of the week.

From the U.S, jobless claims and private sector PMIs will also influence.

Economic data from China will set the tone on Monday, with GDP and industrial production figures in focus.

While the stats will provide direction, news updates on the war in Ukraine will remain the key driver along with central bank chatter.

European Equities: A Week in Review – 08/04/22

The Majors

It was a mixed week for the European majors in the week ending April-8, 2022.

The EuroStoxx600 rose by 0.57%, while the CAC40 and the DAX ended the week with losses of 2.04% and 1.13%, respectively.

Market angst over FED monetary policy and the ongoing Russian invasion of Ukraine weighed on demand for riskier assets.

Economic data from the Eurozone delivered mixed results, which failed to offset market sentiment toward FED monetary policy.

News updates on China’s lockdowns to curb the spread of COVID-19 added to the negative sentiment in the week.

The Stats

It was a busy week, with the markets focused on service sector activity and the German economy.

Stats from Germany delivered mixed results. In February, Germany’s trade surplus widened from €8.9bn to €11.5bn, with industrial production up 0.2%. Factory orders slid by 2.2%, however, to test support.

Service sector PMIs were more upbeat. France and Germany saw service sector activity pickup, while Italy and Spain saw activity moderate. Despite this, the Eurozone’s services PMI rose from 55.5 to 55.6. As a result of disappointing manufacturing numbers, the Eurozone’s composite PMI fell from 55.5 to 54.9.

On Thursday, the ECB monetary policy meeting minutes also drew interest.

In line with expectations, policymakers discussed cutting back on stimulus to curb inflation. Policymakers noted that “three forward guidance conditions for an upward adjustment of the key ECB interest rate had either already been met or were very close to being met.”

Despite the need to curb inflation, the war in Ukraine left policymakers on a more cautious footing.

From the U.S

In the first half of the week, economic data included factory orders and service sector PMIs.

The stats were mixed. Factory orders fell by 0.5% in February, partially reversing a 1.5% rise from January, while service sector activity improved.

In March, the market’s preferred ISM Non-Manufacturing PMI increased from 56.5 to 58.3.

On Thursday, jobless claims were also impressive. In the week ending April-01, initial jobless claims fell from 171k to 166k.

While the stats were market positive, the FOMC meeting minutes weighed. More hawkish than anticipated minutes hit the global equity markets. The minutes revealed plans to begin cutting the FED balance sheet by $95bn per month amidst a rising interest rate environment to curb inflation.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Volkswagen and BMW slid by 2.88% and 2.53%, respectively, with Continental falling by 2.24%. Daimler ended the week with a more modest 0.43% loss.

It was a mixed week for the banking sector. Deutsche Bank ended the week up 0.19%, while Commerzbank fell by 3.20%.

From the CAC, it was a bearish week for the banks. Credit Agricole and Soc Gen slumped by 9.43% and 10.41%, respectively. BNP Paribas slid by 7.43%.

Things were also bearish for the French auto sector. Stellantis NV and Renault ended the week down 6.92% and 9.26%, respectively.

Air France-KLM and Airbus saw losses of 3.27% and 6.86%, respectively.

On the VIX Index

A four-week losing streak ended for the VIX in the week ending April-08.

Reversing a 5.67% fall from the previous week, the VIX rose by 7.79% to end the week at 21.16.

2-days in the green from 5 sessions, which included a 13.25% jump on Tuesday, delivered the upside.

In the week, the NASDAQ 100 slid by 3.86%. The Dow and the S&P500 fell by 0.28% and 1.27%, respectively.

VIX 090422 Weekly Chart

The Week Ahead

It is a busy week ahead on the Eurozone economic calendar.

ZEW Economic Sentiment figures for Germany and the Eurozone are out on Tuesday. The markets will likely accept another deterioration in sentiment as Russia continues to bomb Ukraine.

On Wednesday, Eurozone industrial production figures will also draw attention.

The main event of the week, however, is the ECB monetary policy decision. A shift in stance on interest rates to curb inflation would test support for the majors.

Finalized inflation figures for member states are also due out. We don’t expect the numbers to materially influence the majors, however.

From the U.S, inflation figures are due out on Tuesday. Expect plenty of market sensitivity to the numbers following last week’s hawkish FOMC meeting minutes.

On Wednesday, wholesale inflation figures will also draw interest ahead of a busy end of the week.

With the markets closed on Friday, retail sales, consumer sentiment, and jobless claims will influence this Thursday. A slump in consumer spending, a rise in jobless claims, and a fall in consumer sentiment would be market risk negative.

Economic data from China will also provide direction, with inflation and trade data due out.

While the stats and monetary policy will provide direction, news updates on the war in Ukraine will remain the key driver.

European Equities: A Week in Review – 01/04/22

The Majors

It was a bullish week for the European majors in the week ending April-1, 2022.

The CAC40 rose by 1.99%, with the EuroStoxx600 and the DAX ending the week with gains of 1.06% and 0.98%, respectively.

It was a choppy week for the European majors. Through the first half of the week, hopes of an end to the Russian invasion of Ukraine drove demand for riskier assets.

Failure to agree to end the invasion led to a partial retracement through the second half of the week.

Economic data took a back seat once more, with disappointing manufacturing sector PMIs having limited impact. A downward trend in crude oil prices was positive amidst concerns over inflation.

The Stats

Mid-week, the German economy was in the spotlight. While the stats were skewed to the negative, the impact on the European majors was modest. With Russia’s invasion of Ukraine ongoing, investors anticipate a near-term impact on economic activity.

In April, Germany’s GfK Consumer Climate Indicator fell from -8.5 to -15.5, with retail sales rising by just 0.3% in February.

Unemployment numbers were also underwhelming, with an 18k fall in unemployment leaving the unemployment rate at 5.0%.

On Friday, manufacturing sector PMI numbers for March also failed to impress.

In March, Spain’s manufacturing PMI fell from 56.9 to 54.2, with Italy’s PMI declining from 58.3 to 55.8. Economists had forecast PMIs of 55.5 and 57.0, respectively.

The French manufacturing PMI fell from 57.2 to 54.7, down from a prelim of 54.8. Germany’s PMI declined from 58.4 to 56.9, down from a prelim 57.6.

For the Eurozone, the manufacturing PMI fell from 58.2 to a 14-month low of 56.6, down from a prelim 57.0.

Other stats in the week included finalized inflation figures for member states and the Eurozone and French consumer spending figures. These stats drew little interest, with Germany’s economy and survey-based data in focus.

From the U.S

It was a busier week on the economic calendar. Early in the week, consumer confidence and JOLTs job openings drew interest. Consumer confidence improved in March, with JOLTs job openings coming in better than forecasted.

Mid-week, ADP nonfarm payrolls, and Q4 GDP numbers failed to deliver market support. The release of the stats coincided with a shift in sentiment towards Russia and Ukraine reaching a ceasefire agreement.

According to the ADP, nonfarm payrolls increased by 455k in March, down from 486k in February. The U.S economy also grew at a slower pace than previously estimated.

Market attention then shifted to Thursday, with inflation, personal spending, and jobless claims drawing investor interest.

A further pickup in inflationary pressure supported FED Chair Powell’s more hawkish stance on monetary policy.

While personal spending was weak, nonfarm payrolls rose at a decent clip in March.

In March, nonfarm payrolls increased by 431k, following a 750k increase in February. The March numbers tested appetite for riskier assets, with the markets seeing 431k good enough for a more aggressive FED rate path.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Volkswagen rallied by 4.23%, with BMW and Continental ending the week with gains of 1.43% and 1.55%, respectively. Daimler rose by a more modest 0.44%.

It was yet another bullish week for the banking sector. Deutsche Bank and Commerzbank rose by 1.41% and 0.28%, respectively.

From the CAC, it was a bullish week for the banks. BNP Paribas rallied by 3.38%, with Credit Agricole and Soc Gen gaining 2.25% and 2.69%, respectively.

Things were also bullish for the French auto sector. Stellantis NV and Renault ended the week up 1.87% and 4.70%, respectively.

Air France-KLM and Airbus rose by 1.21% and 3.24%, respectively.

On the VIX Index

It was a fourth consecutive week in the red for the VIX in the week ending April-01, marking the fifth decline in seven weeks.

Following a 12.82% slide from the previous week, the VIX fell by 5.67% to end the week at 19.63.

3-days in the red from 5 sessions, which included a 5.67% decline on Monday, delivered the downside.

For the week, the Dow slipped by 0.12%. The NASDAQ 100 and the S&P500 gained 0.65% and 0.06%, respectively.

VIX 010422 Weekly Chart

The Week Ahead

It’s a relatively busy week ahead on the Eurozone economic calendar. On Monday, trade data from Germany will draw interest ahead of the member state and Eurozone private sector PMIs on Tuesday.

In the second half of the week, the German economy will be back in focus. Factory orders and industrial production will draw attention.

From the U.S, ISM Non-Manufacturing PMI and Jobless claims will draw interest on Tuesday and Thursday.

Away from the economic calendar, Russia’s invasion of Ukraine will remain a key driver in the week. Progress towards a ceasefire would support the European majors.

European Equities: A Week in Review – 25/03/22

The Majors

It was a mixed week for the European majors in the week ending 25th March.

The EuroStoxx600 slipped by 0.06%, with the CAC40 and the DAX ending the week down by 1.01% and 0.74%, respectively.

Disappointing economic data from the Eurozone, surging crude oil prices amidst inflation concerns, and hawkish Fed Chair Powell chatter contributed to the losses.

Russia’s continued bombing of civilian sites in Ukraine remained market negative, with the ECB highlighting the downside risks of the invasion to the Eurozone economy.

The Stats

Prelim private sector PMI figures for France, Germany, and the Eurozone were in focus on Thursday.

While the PMIs came in ahead of forecasts, private sector activity grew at a slower pace in March. The Eurozone’s composite PMI fell from 55.5 to a 2-month low of 54.5. Weighing on private sector activity was the manufacturing sector. The Eurozone’s manufacturing PMI fell to a 14-month low of 57.0.

On Friday, German business sentiment figures also disappointed, with the manufacturing sector weighing on headline figures. The IFO Business Climate Index fell from 98.5 to 90.8. While current sentiment remained resilient, the expectations indicator tumbled from 98.4 to 85.1.

From the ECB, the Economic Bulletin added to the doom and gloom, with the ECB highlighting uncertainty ahead and risks to the economy tilted to the downside.

From the U.S

It was a mixed week on the economic data front. Core durable goods and consumer sentiment were disappointing, while private sector PMI and labor market numbers were upbeat.

According to prelim figures, the U.S Services PMI rose from 56.5 to 58.9, with the manufacturing PMI up from 57.3 to 58.5. In the week ending 18th March, jobless claims fell back to sub-200k levels, also market positive.

Core durable goods orders fell unexpectedly, however, with consumer sentiment waning in March.

On the monetary policy front, Fed Chair Powell took a hawkish stance on interest rates. Early in the week, Powell talked of a willingness to take a more aggressive rate path to curb inflation.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental and Volkswagen ended the week with losses of 3.57% and 1.78%, respectively. BMW rallied by 2.62%, however, with Daimler ending the week up 0.93%.

It was another bullish week for the banking sector. Deutsche Bank rallied by 5.75%, with Commerzbank gaining 2.29%.

From the CAC, it was a bearish week for the banks. BNP Paribas led the way, sliding by 6.28%, with Soc Gen and Credit Agricole seeing losses of 3.02% and 1.93%, respectively.

Things were also bearish for the French auto sector. Stellantis NV and Renault ended the week down 1.53% and 1.33%, respectively.

Air France-KLM and Airbus rose by 2.90% and 1.32%, respectively.

On the VIX Index

It was a third consecutive week in the red for the VIX in the week ending 25th March, marking the fourth decline in six weeks.

Following a 22.37% slide from the previous week, the VIX fell by 12.82% to end the week at 20.81.

4-days in the red from 5 sessions, which included an 8.06% slide on Thursday, delivered the downside.

For the week, the Dow rose by 0.31%, with the NASDAQ 100 and the S&P500 gaining 1.98% and 1.79%, respectively.

VIX 260322 Weekly Chart

The Week Ahead

It’s a relatively busy week ahead on the Eurozone economic calendar. Early in the week, the German economy will draw attention. Consumer confidence figures are due out.

On Thursday, the focus will remain on the German economy. Retail sales and unemployment figures are in focus.

At the end of the week, manufacturing sector PMIs for member states and the Eurozone will also draw more interest.

On the inflation front, prelim March inflation figures for member states and the Eurozone will be key. The markets expect another surge in consumer prices, which will test support for riskier assets.

From the U.S, consumer confidence, ADP nonfarm employment, and Q4 GDP numbers will influence early in the week.

Expect consumer confidence and ADP numbers to be key.

On Thursday, attention will shift to personal spending, inflation, and jobless claims figures.

The key stat of the week, however, will be the nonfarm payroll numbers due out on Friday.

On the monetary policy front, FOMC member chatter will need monitoring.

Away from the economic calendar, Russia’s invasion of Ukraine will remain a key driver in the week.

European Equities: A Week in Review – 18/03/22

The Majors

It was another bullish week for the European majors in the week ending 18th March.

The EuroStoxx600 rose by 5,26%, with the CAC40 and the DAX ending the week up by 5.75% and 5.76%, respectively.

Despite the ongoing Russian invasion of Ukraine, talks of a ceasefire delivered mid-week support. The hope of fresh stimulus from China to support the Chinese economy was also market positive. A retreat in crude oil prices in the week added further support.

Economic data from the Eurozone took a back seat, despite a slump in economic sentiment towards Germany and the Eurozone.

FED monetary policy also failed to spook the markets, with the FED lifting rates by just 25 basis points on Wednesday.

The Stats

ZEW Economic sentiment figures for Germany and the Eurozone disappointed in the week. The markets were expecting weak numbers, however, as analysts assess the impact of the Russian invasion of Ukraine on the economic outlook.

Late in the week, Eurozone trade data and wage growth had a muted impact on the EUR. The impact was muted despite wages growing at a softer pace in Q4 and the Eurozone’s trade deficit widening from €4.6bn to €27.2bn in January.

From the U.S

In the first half of the week, wholesale inflation and retail sales were the key stats. The numbers were mixed.

The core producer price index increased by 0.2% in February, which was softer than a 1.0% rise in January.  For riskier assets, the softer wholesale inflation figures were market positive.

More significantly, retail sales were also disappointing. Core retail sales rose by just 0.2%, with retail sales up 0.3% in February. Both had seen marked increases in the month prior.

Jobless claims and Philly FED Manufacturing numbers were more upbeat later in the week. In February, the Philly FED Manufacturing PMI rose from 16.0 to 27.4, with initial jobless claims falling from 229k to 214k in the week ending 10th March.

While the stats drew plenty of interest, the FED monetary policy decision and projections were key in the week.

In line with market expectations, the FED raised interest rates by 25 basis points on Wednesday, with interest rate projections hawkish for the remainder of the year. Interest rates are projected to hit 2.8% by Q1 2023 versus a previously forecast of 0.9%.

From China

Fixed asset investment and industrial production figures were in focus. The numbers didn’t disappoint, though concerns over renewed lockdown measures to contain a new wave of COVID-19 infections overshadowed the upbeat numbers.

In February, fixed asset investments rose by 12.2%, year-on-year, up from 4.9% in January.

Industrial production increased by 7.5%, up from 4.3% in January.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Continental rallied by 7.79%, with Volkswagen gaining 7.11%. BMW and Daimler ended the week up 4.81% and 6.90%, respectively.

It was a better week for the banking sector. Deutsche Bank and Commerzbank surged by 14.94% and 12.18%, respectively.

From the CAC, it was a bullish week for the banks. Soc Gen led the way, rallying by 10.36%, with BNP Paribas and Credit Agricole seeing gains of 8.81% and 9.34%, respectively.

Things were also bullish for the French auto sector. Stellantis NV and Renault ended the week up 9.25% and 4.48%, respectively.

Air France-KLM and Airbus rose by 6.87% and 2.49%, respectively.

On the VIX Index

It was a second consecutive week in the red for the VIX in the week ending 18th March, marking the third decline in 5 weeks.

Following a 3.85% fall from the previous week, the VIX slid by 22.37% to end the week at 23.87.

4-days in the red from 5 sessions, which included a 10.59% slide on Wednesday, delivered the downside.

For the week, the NASDAQ jumped 8.18%. The Dow and the S&P500 rallied by 5.50% and 6.16%, respectively.

VIX 190322 Weekly Chart

The Week Ahead

It’s a relatively busy week ahead on the Eurozone economic calendar. Prelim March private sector PMIs for France, Germany, and the Eurozone will be the key stats of the week. The PMIs are due on Thursday, ahead of Germany’s IFO Business Climate Index figures on Friday.

From the U.S, economic data on Thursday will influence.

Key stats include jobless claims, core durable goods, and March’s prelim services PMI.

Away from the economic calendar, news updates on Russia’s invasion of Ukraine and any moves by China will also need monitoring.

UK Mining and Financial Stocks Deliver Early FTSE100 Support

It has been a particularly quiet morning on the economic calendar. There were major economic indicators from the Eurozone or the UK to spook the markets going into the open.

Appetite for riskier assets improved through the morning. A rebound in Chinese stocks provided much-needed support. In response to hopes of Beijing delivering stimulus, the Hang Seng Index surged by 9.08%, with the CSI300 rallying by 4.32%.

The FTSE100 Early Movers

Following a Tuesday slump that left bank and mining stocks in the deep red, it was risk-at the open.

At the time of writing, the FTSE100 was up 1.01% to 7,260.45.

UK100 160322

Standard Chartered led the banking sector, rallying by 3.27%. Barclays (+1.85%), HSBC Holdings (+0.97%), and Lloyds (+1.76%) saw more modest gains.

The upside across the miners was more impressive. Rio Tinto (+2.28%), Glencore (+2.12%), and Antofagasta (+2.55%) led the way, while Anglo American (+0.46%) and BHP Billiton (+1.07%) trailed.

Hopes of economic stimulus eased pressure on mining stocks early in the session, with the upside coming despite an anticipated FED rate hike after the market close.

Risk Appetite Delivers Early GBP/USD Support

Following Tuesday’s gain, today’s shift in market risk sentiment provided further respite for the Pound.

At the time of writing, the Pound was up by 0.18% to $1.30673. On Tuesday, the Pound rose by 0.31% against the Dollar to end the day at $1.3042.

Cable 160322 Daily Chart

For the day ahead, much will now rest in the hands of the FED. The markets are expecting a 25-basis point hike. Of greater influence will be the interest rate and economic projections. Russia’s invasion of Ukraine is likely to push inflation even higher. The markets will be keen to see how the FED plans to respond.

UK Stats Deliver GBP Support While COVID-19 Sinks the FTSE100

It was relatively busy on the UK economic calendar this morning. Key stats included claimant count and unemployment change figures along with the UK’s unemployment rate.

The stats were skewed to the positive, providing Pound support going into the UK session.

According to the Office for National Statistics,

  • The unemployment rate fell by 0.2 percentage points to 3.9% in January, with job vacancies up to a new record of 1,318,000.
  • On a rolling 3/M basis, employment slipped by 12k after falling by 38k in December.
  • While the 3/M rolling figure was disappointing, claimant counts continued to slide. In February, claimant counts slid by 48.1k, following a 67.3k tumble in January.

Market Impact

Ahead of today’s stats, the Pound fell to a pre-stat and current-day low of $1.2999 before striking a pre-stat and current-day high of $1.30515.

In response to today’s employment figures, the Pound rose to a post-stat high of $1.30515 before falling to a post-stat low of $1.30176.

At the time of writing, the Pound was up by 0.19% to $1.30626. With the markets expecting the FED and the BoE to lift rates this week, market risk appetite remains the key driver for the Pound.

Cable 150322 Hourly Chart

While the Pound responded positively to this morning’s numbers, it has been a bearish start for the FTSE100. The Hang Seng and the CSI300 weighed on the FTSE100. Today, the Hang Seng Index slumped by 5.72%, with the CSI300 sliding by 4.57%. At the time of writing, the FTSE100 was down by 1.34% to 7,076.15.

UK100

A reported surge in COVID-19 cases in China, resulting in new lockdown measures and fears of further supply chain disruption, hit the 100. Mining stocks were among the worst hit , with Rio Tinto (-4.16%), Anglo American (-3.06%), and Glencore (-3.01%) seeing heavy losses.

Market sentiment towards Russia’s continued bombing of Ukraine added to the market angst this morning.

Wall Street Week Ahead: Lennar, FedEx, Dollar General, GameStop and Fed’s Policy in Focus

The Ukraine-Russia crisis continued to dominate market movements, causing extreme volatility in the financial market and pushing the oil prices to a decade high and depressing stocks.

The U.S. Federal Reserve is widely expected to hike by 25 basis points to 0.25%-0.5% on Wednesday. Still, analysts will closely monitor inflation and the economic growth outlook and how the central bank projects future rate increases. The fear of a vicious cycle of low growth and higher inflation could deter the Fed from raising rates faster than expected previously.

Last week, the S&P 500 dropped 2.9%. Stocks in the energy sector were the top performers, up nearly 1.9%. Energy stocks have rallied on concerns about tightening supplies that have driven up oil and gas prices. The rally would likely continue this week.

In addition, investors will focus on December quarter earnings for economically sensitive stocks, which should show better profits than technology stocks amid surging inflation.

Earnings By Day

Earnings Calendar For The Week Of March 14

Monday (March 14)

TICKER COMPANY EPS FORECAST
CVGW Calavo Growers $-0.01
CORR CorEnergy Infrastructure Trust $0.37
MTN Vail Resorts $5.73

 

Tuesday (March 15)

TICKER COMPANY EPS FORECAST
CAL Caleres $0.46
CHMI Cherry Hill Mortgage Investment $0.28
IHS IHS Holding $0.04
KNDI Kandi Technologies Group $-0.07

 

Wednesday (March 16)

IN THE SPOTLIGHT: LENNAR

The home construction and real estate company Lennar is expected to report earnings per share of $2.80 in the fiscal first quarter, which represents year-over-year growth of over 37% from $2.04 per share seen in the same period a year ago.

The Miami, Florida-based company would post year-over-year revenue growth of more than 16% to around $6.2 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“2020-2021 proved to be strong years for the U.S. housing market despite the COVID-19 pandemic. We believe favourable demographics will support steady residential construction activity this decade, with annual housing starts averaging 1.6 million units. We expect first-time buyers will be a key driver of future housing demand, and Lennar is well-positioned to capture these potential buyers with its increased mix of entry-level homes,” noted Brian Bernard, Sector Director at Morningstar.

Lennar controls an ample land supply, which affords the company the ability to meet future demand while focusing on improving cash flows and maintaining a strong balance sheet. The company has shifted to a lighter land acquisition strategy, which seeks to reduce the amount of capital tied up in land by purchasing smaller land parcels and relying more on land options to acquire land on a just-in-time basis. We think this strategy should help the company realize better returns on invested capital and cash flows over the business cycle.”

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
GES Guess? $1.16
JBL Jabil $1.24
LE Lands’ End $0.33
SMTC Semtech $0.49

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 16

Thursday (March 17)

IN THE SPOTLIGHT: FEDEX, GAMESTOP, DOLLAR GENERAL

FEDEX: The Memphis, Tennessee-based multinational delivery services company FedEx is expected to report its fiscal third-quarter earnings of $4.47 per share, which represents year-over-year growth of over 28% from $3.47 per share seen in the same period a year ago.

The delivery firm would post revenue growth of over 9% to $23.58 billion. It is worth noting that the company has beaten earnings estimates only twice in the last four quarters.

“We are estimating adjusted EPS of $4.76, above the $4.69 consensus. FedEx (FDX) beat on the top and bottom lines last quarter as demand held in while costs remained manageable. We expect most strategic questions to be deferred to the June 28 /29 investor day,” noted Helane Becker, equity analyst at Cowen.

GAMESTOP: The world’s largest multichannel video game retailer GameStop is expected to report its fourth-quarter earnings of $1.06 per share, an improvement from a loss of -$1.39 per share seen in the third quarter. The Grapevine, Texas-based company is forecast to post year-over-year revenue growth of about 4% to around $2.2 billion.

DOLLAR GENERAL: The discount retailer is expected to report earnings per share of $2.59 in the fourth quarter of 2021, which represents a year-over-year decline of over 1.1% from $2.62 per share seen in the same period a year ago.

The Goodlettsville Tennessee-based company is expected to post a net income of $8.69 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. The ’22 investment setup is less favourable given decelerating momentum from recent initiatives, a tougher macro backdrop, and ramping expense pressures (particularly on labour). Street estimates look full/fair with less upside potential in our view,” noted Simeon Gutman, equity analyst at Morgan Stanley.

Dollar General’s (DG) valuation (~20x P/E multiple) is in-line with the market and screens relatively fair vs both relative and absolute history. Emerging initiatives (Popshelf, healthcare, produce) are longer-term drivers but likely won’t move the needle in ’22.”

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
ACN Accenture $2.36
DG Dollar General $2.59

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 17

Friday (March 18)

No major earnings are scheduled for release.

European Equities: A Week in Review – 11/03/22

The Majors

It was a bullish week for the European majors in the week ending 11th March. The upside in the week was modest, however, with the major European bourses still deep in the red for the current month.

Once more, economic data took a back seat, with the markets at the mercy of news updates on Russia’s invasion of Ukraine.

Hopes of a resolution through diplomatic channels provided support.

The EuroStoxx600 rose by 2.23%, with the CAC40 and the DAX ending the week up by 3.28% and by 4.07%, respectively.

The Stats

The German economy was in focus early in the week. Impressive numbers provided little support, however, with the January numbers not capturing the impact of sanctions on the German economy.

In January, factory orders rose by 1.8%, with industrial production up 2.7%. Consumer spending was also on the rise, despite the continued increase in consumer prices. Retail sales jumped by 2.7% in January.

Other stats, including Eurozone GDP and member state inflation figures, drew even less attention, with the ECB in action.

In line with market expectations, the ECB left interest rates unchanged on Thursday. The ECB did announce that it would wind down asset purchases faster than planned. The more hawkish stance came despite ECB President Lagarde conceding that the Russian invasion of Ukraine will have a material impact on economic activity and inflation.

From the U.S

Inflation and jobless claims were the key stats in the week.

In the week ending 3rd March, initial jobless claims increased from 216k to 227k. More significantly, the annual rate of inflation accelerated from 7.5% to 7.9%. The core annual rate of inflation picked up from 6.0% to 6.4%, casting yet more FED monetary policy uncertainty on the markets.

From Elsewhere

Trade and inflation data from China also had a limited impact on the European majors, despite upbeat numbers.

China’s USD trade surplus widened from $94.46bn to $115.95bn in February. The annual rate of inflation held steady at 0.9%, which was also market positive.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental and Daimler rose by 0.55% and by 1.02%, while BMW and Volkswagen ended the week down by 0.93% and by 0.55%, respectively.

It was a better week for the banking sector. Deutsche Bank and Commerzbank rallied by 4.84% and by 4.87%, respectively.

From the CAC, it was a mixed week for the banks. Credit Agricole slipped by 0.10%, while BNP Paribas and Soc Gen saw gains of 3.90% and 6.68%, respectively.

Things were bearish for the French auto sector. Stellantis NV and Renault fell by 2.36% and by 3.50% respectively.

Air France-KLM and Airbus rose by 4.99% and by 6.65%, respectively.

On the VIX Index

It was back into the red for the VIX in the week ending 11th March.

Partially reversing a 15.91% rise from the previous week, the VIX fell by 3.85% to end the week at 30.75.

3-days in the red from 5 sessions, which included a 7.63% fall on Wednesday delivered the downside.

For the week, the NASDAQ slid by 3.53%, with the Dow and the S&P500 falling by 1.99% and 2.88%, respectively.

VIX 120322 Weekly Chart

The Week Ahead

It’s a quiet week ahead on the Eurozone economic calendar. The German and Eurozone ZEW Economic Sentiment figures for March will be in focus on Tuesday. On Friday, Eurozone trade and wage growth figures will also draw interest.

We don’t expect the numbers to have a material impact on the European majors, however. News updates on Russia and Ukraine will remain pivotal in the week ahead.

From the U.S, wholesale inflation and retail sales figures will influence ahead of the FOMC monetary policy decision on Wednesday. FED Chair Powell had talked of a smaller rate hike this month and then more aggressive hikes in the months ahead. Expect the projections and press conference to therefore have the greatest impact.

On Thursday jobless claims and Philly FED manufacturing numbers are also due out but should have a muted impact on the European markets that will be responding to the FED’s overnight projections.

From China, fixed asset investment, industrial production, and retail sales figures will need considering on Tuesday.

FedEx Is Well Worth Watching Ahead of Q3 Earnings

The Memphis, Tennessee-based multinational delivery services company FedEx is expected to report its fiscal third-quarter earnings of $4.47 per share, which represents year-over-year growth of over 28% from $3.47 per share seen in the same period a year ago.

The delivery firm would post revenue growth of over 9% to $23.58 billion. It is worth noting that the company has beaten earnings estimates only twice in the last four quarters.

“We are estimating adjusted EPS of $4.76, above the $4.69 consensus. FedEx (FDX) beat on the top and bottom lines last quarter as demand held in while costs remained manageable. We expect most strategic questions to be deferred to the June 28 /29 investor day,” noted Helane Becker, equity analyst at Cowen.

At the time of writing, FedEx stock traded 2.51% lower at $213.77 on Friday. The stock tumbled more than 17% so far this year after falling 0.4% in 2021.

Analyst Comments

“We expect a miss for F3Q22 as ongoing pandemic tailwinds are offset by headwinds from Omicron, weather and labour challenges. The sentiment is cautious and the stock has underperformed but the risk to numbers (esp. FY23/24) remains high and we will not have answers until the June analyst day,” noted Ravi Shanker, equity analyst at Morgan Stanley.

“We see EBIT growth slightly down in FY22 as volume pandemic related tailwinds begin to fade and the company grapples with very difficult comps. We continue to see secular threats to Parcel and remain skeptical that these trends will be sustainable but believe that until there is evidence of a reversal in earnings momentum, the stock can trade at its historical multiple (14-15x PE) on current EPS.”

FedEx Stock Price Forecast

Sixteen analysts who offered stock ratings for FedEx in the last three months forecast the average price in 12 months of $309.63 with a high forecast of $345.00 and a low forecast of $260.00.

The average price target represents a 44.49% change from the last price of $214.29. Of those 16 analysts, 14 rated “Buy”, two rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $260 with a high of $375 under a bull scenario and $125 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the delivery firm’s stock.

Several analysts have also updated their stock outlook. JP Morgan cut the price objective to $297 from $312. BofA lowered the price target to $297 from $310. Bernstein raised the target price to $353 from $339. Cowen lifted the price target to $310 from $283.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

Rivian Shares Tumble As 2022 Production Outlook Disappoints

Shares of electric vehicles manufacturer Rivian fell over 8% on Friday after the company cut its production outlook in half as surging input costs and supply chain bottlenecks continue to bite.

Irvine, California-based EV start-up warned that supply-chain problems could halve its planned production this year to just 25,000 vehicles. Net loss for the fourth quarter was $2.46 billion, or $4.83 per share, compared with a loss of $353 million, or $3.50 per share, from the year-ago period, Reuters reported.

The company’s reported revenue of $54 million, fell far short of analysts’ expectations of $60 million. Cash and equivalents amounted to $18.4 billion in the last quarter.

At the time of writing, Rivian stock traded over 8.0% lower at $37.82 on Friday, way below their IPO price of $78. The stock fell more than 60% so far this year.

Analyst Comments

Rivian is a well-capitalized pure EV start-up OEM that can leverage its strategic relationship with Amazon to derive scale and build software and services competencies for its consumer business. We forecast Rivian to sell 1.5 million BEVs annually in 2030 (801k Consumer / 653k Commercial). We forecast Rivian’s total revenues to grow at a 34% CAGR from 2025 to 2030,” noted Adam Jonas, equity analyst at Morgan Stanley.

Rivian’s software services business can grow from $641 million revenues in 2025, $7 billion in 2030 and $36 billion in 2040, as the installed base grows in size exponentially. We value Rivian at $147, 1.3x 2030 EV/Sales, expensive vs Auto OEMs but not versus software/tech companies and in-line with EV startups such as Tesla and Lucid.”

Rivian Stock Price Forecast

Twelve analysts who offered stock ratings for Rivian in the last three months forecast the average price in 12 months of $85.00 with a high forecast of $147.00 and a low forecast of $35.00.

The average price target represents a 119.47% change from the last price of $38.73. Of those 12 analysts, eight rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $94 with a high of $200 under a bull scenario and $40 under the worst-case scenario. The investment bank gave an “Overweight” rating on the electric vehicles manufacturer’s stock.

Several analysts have also updated their stock outlook. Barclays cut the target price to $115 from $120. Deutsche Bank initiated with a buy rating and set the target price to $130. Mizuho initiated with a buy rating and set the target price at $145.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

What to Expect From Dollar General’s Q4 Earnings?

Discount retailer Dollar General is expected to report earnings per share of $2.59 in the fourth quarter of 2021, which represents a year-over-year decline of over 1.1% from $2.62 per share seen in the same period a year ago.

The Goodlettsville Tennessee-based company is expected to post a net income of $8.69 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

At the time of writing, Dollar General stock traded 1.26% lower at $204.60 on Thursday. The stock rose more than 12% so far this year after surging over 40% in 2021.

Analyst Comments

Dollar General (DG) is a best-in-class operator offering a rare combination of 1) consistent, high-quality top-and bottom-line results; 2) visible store growth; and 3) a shareholder-friendly capital allocation policy. The ’22 investment setup is less favourable given decelerating momentum from recent initiatives, a tougher macro backdrop, and ramping expense pressures (particularly on labour). Street estimates look full/fair with less upside potential in our view,”

Dollar General’s (DG) valuation (~20x P/E multiple) is in-line with the market and screens relatively fair vs both relative and absolute history. Emerging initiatives (Popshelf, healthcare, produce) are longer-term drivers but likely won’t move the needle in ’22.”

Dollar General Stock Price Forecast

Eight analysts who offered stock ratings for Dollar General in the last three months forecast the average price in 12 months of $235.13 with a high forecast of $265.00 and a low forecast of $220.00.

The average price target represents a 14.80% change from the last price of $204.82. Of those eight analysts, six rated “Buy”, two rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $225 with a high of $300 under a bull scenario and $170 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the discount retailer’s stock.

Several analysts have also updated their stock outlook. Deutsche Bank cut the price target to $230 from $251. Citigroup lowered the price objective to $258 from $260. Evercore ISI slashed the target price to $240 from $245.

“Reasons To Buy: Dollar General’s commitment toward better pricing, private label offering, inventory management, supply chain efficiencies and cost containment should drive sales and margins in the long run,” noted analysts at ZACKS Research.

“Reasons To Sell: Incremental investments in pay and benefits for team members, any supply chain disruptions, and increase in distribution and transportation costs may hurt margins.”

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

General Electric Shares Dip After Group Reaffirms Earnings Outlook

General Electric shares fell over 1.4% in pre-market trading on Thursday after the company reiterated its already-lowered earnings forecast for this year at its Investors Day as surging inputs costs and supply chain bottlenecks continue to bite.

The Boston Massachusetts-based company forecasts adjusted profit for the year in the range of $2.80-$3.50 per share. The company expects its profit margin will grow by 150 basis points that will generate $5.5 billion-$6.5 billion in free cash flow. General Electric also predicted an operating profit of nearly $10 billion and a free cash flow of around $7 billion for next year.

In the fourth-quarter results, which was released in late January, the company reported quarterly adjusted earnings of $0.92 ​ per share, beating the Wall Street consensus estimates of $0.83 per share. However, its revenue declined more than 7% to $20.3 billion from a year earlier. That missed analysts’ expectations of $21.5 billion.

General Electric stock fell 1.4% to $89.95 in pre-market trading on Thursday. The stock fell more than 3% so far this year after rising over 9% in 2021.

Analyst Comments

“Tail risks have been sufficiently managed over the past 4 years as to allow the particularly attractive Aviation and Healthcare franchises to be valued independently and pursue additional strategic optionality,” noted Joshua Pokrzywinski, equity analyst at Morgan Stanley.

“Power, pension, and Long-Term Care are no longer overarching drags on leverage, profitability, and cash. The catalyst path remains uneven, however, and deleveraging to unlock more equity value will ramp in earnest in mid-2022 through year-end 2023 as cash seasonality and Aviation aftermarket ramp. We see this as a good risk/reward framework today improving further as the year progresses.”

General Electric Stock Price Forecast

Fifteen analysts who offered stock ratings for General Electric in the last three months forecast the average price in 12 months of $112.33 with a high forecast of $132.00 and a low forecast of $55.00.

The average price target represents a 23.10% change from the last price of $91.25. Of those 15 analysts, 11 rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $120 with a high of $160 under a bull scenario and $70 under the worst-case scenario. The investment bank gave an “Overweight” rating on the company’s stock.

Several analysts have also updated their stock outlook. UBS cut the price objective to $132 from $143. Credit Suisse lowered the target price to $116 from $122. RBC raised the price target to $113 from $108. BofA Global Research lashed the price objective to $132 from $140.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

Campbell Soup Missed Expectations for Quarterly Revenue

The Camden County, New Jersey-based soups and snacks maker Campbell Soup reported lower-than-expected revenue in the fiscal second quarter as COVID-19 curbs eased and consumers went out to eat more, affecting processed food sales.

The Camden New Jersey-based reported quarterly adjusted earnings of 0.69 cents​​ per share, lower than the Wall Street consensus estimates of $0.78 per share. In addition, the company said its revenue fell more than 3% to $2.2 billion from a year earlier. That too missed the analysts’ expectations of $2.24 billion.

“Volumes more pressured than expected, but promos lifted in Snacks, driving pricing higher. FY’22 guide reiterated. H2 implied EPS of $1.17-1.27 vs. $1.15 consensus, with the delta driven by margin improvement; consensus close to sales forecast at the midpoint. Stock likely flat on the day given recent pullback,” noted Rob Dickerson, equity analyst at Jefferies.

The soups and snacks maker forecasts full-year adjusted earnings in the range of $2.75-$2.85 per share.

At the time of writing, Campbell Soup stock traded 1.6% higher at $42.98 on Wednesday. However, the stock fell 0.20% so far this year after slumping over 10% in 2021.

Analyst Comments

“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity, but face high competition from PEP and MDLZ. Significant organizational changes over the last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies.”

Campbell Soup Stock Price Forecast

Seven analysts who offered stock ratings for Campbell Soup in the last three months forecast the average price in 12 months of $46.00 with a high forecast of $50.00 and a low forecast of $43.00.

The average price target represents an 8.75% change from the last price of $42.30. Of those seven analysts, one rated “Buy”, six rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $45 with a high of $61 under a bull scenario and $22 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the packaged food company’s stock.

Several analysts have also updated their stock outlook. Deutsche Bank raised the target price to $46 from $45. JPMorgan cut the target price to $44 from $45. Piper Sandler lifted the price objective to $45 from $43. Credit Suisse upped the target price to $43 from $41.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

Check out FX Empire’s earnings calendar

Bumble Shares Jump Over 20% on Strong Revenue Outlook

Shares of online dating company Bumble surged over 20% in pre-market trading on Wednesday after the company exceeded profit estimates in the holiday quarter and forecasts solid growth for this year.

On Tuesday, the Austin, Texas-based company reported quarterly adjusted earnings of $0.13 per share, beating market expectations for breakeven results. The company said its revenue jumped over 25% to $208.2 million from a year earlier. However, that missed the consensus of $209.5 million. The diluted loss per share came in at $0.08, worse compared to a loss per share of $0.01 seen a year ago.

The company forecasts total revenue in the range of $207-$210 million in the first quarter of this year and adjusted EBITDA in the range of $47-$49 million. For the full year, it expects total revenue between $934-$944 million and an adjusted EBITDA margin of 26.5%-27%.

“We believe the biggest positive surprise was FY22 Bumble App revenue guidance of 34-36% growth. With the stock down 52% YTD and trading at a 30% discount to MTCH, we believe the recent pullback offers a more attractive opportunity. Buy, $36 PT,” noted Brent Thill, equity analyst at Jefferies.

Bumble stock rose over 21% to $20.1 in pre-market trading on Wednesday. However, the stock slumped over 50% so far this year.

Analyst Comments

Bumble (BMBL) reported in-line rev, with EBITDA 2% above cons., driven by better gross margins. 1Q/FY22 rev guide were above our estimates, with Bumble app seeing strong growth, especially in international markets; BMBL also expects a $20MM rev impact in ’22 from the Ukraine conflict. Stock is +19% AH, while still down sharply YTD. We tweaked ’22-’27 est. & our Price Target goes to $38 vs. $36 prior; maintain Outperform,” noted John Blackledge, equity analyst at Cowen.

Bumble Stock Price Forecast

Eleven analysts who offered stock ratings for Bumble in the last three months forecast the average price in 12 months of $41.09 with a high forecast of $55.00 and a low forecast of $21.00.

The average price target represents a 146.64% change from the last price of $16.66. Of those 11 analysts, seven rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $49 with a high of $85 under a bull scenario and $24 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the online dating company’s stock.

Bumble (BMBL) has become a formidable #2 global online dating player in early innings of international expansion. While we remain bullish on online dating, we are EW given 1) valuation, 2) our preference for a portfolio vs. single brand approach, and 3) less confidence in the ‘global brand’ bull case. BMBL EBITDA margin is likely capped at 33-34% long-term vs. our expectation that MTCH can achieve high-40s,” noted Lauren Schenk, equity analyst at Morgan Stanley.

Several analysts have also updated their stock outlook. Raymond James lowered the price objective to $29 from $48. Cowen and company lifted the price target to $38 from $36. JPMorgan cut the target price to $41 from $50. RBC lowered the target price to $35 from $55.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong selling opportunity.

Check out FX Empire’s earnings calendar