A week before the Fed meeting, FAANG’s earnings and many more economic data will create a huge week. The focus will be on the Fed’s preferred measure of inflation, the Core PCE Price, and BoJ’s policy meeting on Friday.
Tuesday, April 25: US Economic data
CB Consumer Confidence, New Home Sales, Building Permits, and Richmond Manufacturing Index will be released all in one day to give us a brighter idea of the US economic condition. Consumer confidence rose 0.8 ticks to 104.2 in March and released better than expected, which is expected to decrease to 104.0 in April. In the real estate market, we expect a -8.8% decrease in Building Permits in March to lower it to 1.413M units. In the field of selling houses, New Home Sales are supposed to stay flat at the same 1.1% pace as in February. The market expects 634K New Home sales, while anything over 550k is positive for the US economy. In addition, we are waiting for Richmond Manufacturing Index, which has been struggling to turn positive for over a year. Market participants expect to see this index again in positive territory and at 4 in April.
Wednesday, April 26: US Durable Goods Orders
With a 0.1% drop in February, orders for Core durables printed the fourth decline in six months. This is while the ISM manufacturing index also eased for five consecutive months, and manufacturing output has stalled. Manufacturing Purchasing Managers Index in recent months in most surveys has been weak, signaling slower production. Therefore expect durable goods orders to continue to stay under pressure in March. The market expects a 0.8% rise in overall orders, but that would be thanks to a surge in aircraft orders, based explicitly on orders data from Boeing during the month. Core Durable Goods Orders are supposed to drop by -0.2% in March.
Thursday, April 27: Central Bank of Turkey
During the pandemic, and while most central banks have been easing the monetary policies to boost the economy, the central bank in Turkey raises ut rapidly to control inflation and the country’s currency value. A few weeks before Election, we expect no change in its rate policies at 8.5%. That must help the currency value to stay around 19.50 – 20.00 in exchange for one US dollar. At the same time, we should remember that CBRT is not all independent, and most of its decisions are coordinated with the government.
Thursday, April 27: US Q1 GDP
The initial estimates of the first quarter GDP will be released this week. The market expects a 1.8% – 2% growth in the first quarter, primarily because of a jump in consumer spending. However, in recent months, weaker manufacturing production and PMI numbers signal weakness in other parts of the economy. These weaker estimates in manufacturing and industrial sectors will cause a second consecutive quarterly contraction in equipment spending. We can guess about future FOMC policies depending on data and market reactions.
Friday, April 28: Bank of Japan
It will be the first BoJ policy meeting chaired by Ueda, and we expect no specific policy change. However, BoJ can start tightening the policies from the next meeting, as inflation is slowly increasing. On the other hand, growth prospects are subdued, making policymakers think twice before any policy change. Therefore data depending significantly on inflation progress can help us to have better guesses for the October meeting.
Friday, April 28: Eurozone GDP
Even though inflation decreased, primarily due to lower gas and overall energy prices, oil prices have remained steady at some levels, which means it is still possible to face the recession, even though the market expects a slow growth of 0.2%. Since the labor markets are still tight and the unemployment rate across Europe is relatively low, we can be optimistic about this prospect to some extent.
Friday, April 28: US Personal Income & Spending
Recently published data shows that households continue to have the capacity to spend. Still, it can be dropped by -0.1% in March after a strong beginning in January and slow growth in February. Personal income should rise by only 0.2%, while the PCE price index in March must grow by 0.3%, the same pace as in February. Since the price rise and spending are higher than income, the economy is slowing already.
Earnings of the week.
Coca-Cola (KO) will start this week’s earnings report on Monday. And then on Tuesday, Microsoft (MSFT), Alphabet (GOOGL), Visa A (V), PepsiCo (PEP), McDonald’s (MCD), NextEra Energy (NEE), Verizon (VZ), and 3M (MMM) will have earnings call. Meta Platforms (META), Boeing (BA), and CME Group (CME) will have earnings report on Wednesday. On Thursday, Amazon.com (AMZN), Mastercard (MA), Eli Lilly (LLY), Honeywell (HON), Intel (INTC), and Caterpillar (CAT) earnings will be in focus. And finally, Exxon Mobil (XOM), Chevron (CVX), and Nestle (NTOIY) earnings will end this huge week on Friday.
