Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Top 5 Things to Watch in Markets in the Week Ahead

EconomyMar 21, 2021 23:07
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Noreen Burke

Investing.com -- Investors will be watching joint testimony to Congress by Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen on Tuesday and Wednesday amid concerns over how much further the recent surge in Treasury yields can run. A summit organized by the Bank of International Settlements gets underway on Monday and will feature speeches from global central bank leaders, including Powell. The U.S. economic calendar includes data on housing and personal income and spending. Meanwhile, the euro zone will release PMI data for March while the UK is to publish a slew of reports including jobs, inflation, PMIs and retail sales. Here’s what you need to know to start your week.

  1. Powell, Yellen testimony

Powell and Yellen testify before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday where they will discuss the health of the U.S. economy and the importance of fiscal and monetary stimulus in the recovery from the pandemic.

There are also more than half a dozen other Fed officials due to speak during the week, including Vice Chairman Richard Clarida, Vice Chairman Randal Quarles, Fed Governor Lael Brainard, and New York Fed President John Williams.

Financial markets have diverged from the Fed on the possible future outlook for monetary policy, sending yields on U.S. Treasuries to their highest in more than a year.

Investors are pricing in a first rate hike sooner than the Fed currently expects, amid fears that the economy could overheat as it recovers from the pandemic given President Joe Biden’s massive stimulus package combined with the Fed’s easy money policy.

  1. BIS summit

Before his joint testimony to Congress with Yellen, Powell is scheduled to speak Monday at the start of a four-day conference organized by the Bank for International Settlements on innovation in the digital age.

Other global central bank leaders who will be speaking at the summit include European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Bank of Canada head Tiff Macklem.

Meanwhile, a host of central banks are due to hold policy meetings during the week, including in Switzerland, Mexico, and South Africa.

The Swiss National Bank is expected to keep rates unchanged -0.75%, the lowest in the world, and maintain its interventionist stance at its meeting on Thursday.

  1. U.S. economic data

On the data front, durable goods orders and the personal income and spending reports are set to be the highlights of the week, along with figures on new and existing home sales.

The housing data together with the personal income and spending figures, which includes the PCE deflator, the Fed’s preferred inflation measure, will probably show weakness, due to the impact of severe winter storms on economic activity in February. However, economists expect the slump to be short-lived.

The U.S. is also to publish the latest revision of fourth quarter 2020 GDP, which was last reported at an annualized 4.1%.

  1. Stock market volatility

Investors are likely to remain focused on the rise in bond yields that has pressured share prices, even though indexes remain close to their record highs.

Optimism about the prospects for the economic recovery has accelerated a shift into bank and other value stocks, powering the S&P 500 and the Dow to record levels last week.

But the Nasdaq has lagged as technology and high-growth stocks have lost favor in recent months, with their valuations looking less attractive as Treasury yields rise.

Investors may also begin to fret that about the prospect of higher taxes that could threaten the rally in U.S. stocks as the Biden administration looks for ways to pay for its spending plans.

  1. Euro zone, UK data

In the euro zone, PMI data for March will shed light on how the bloc's economy is performing against the background of a chaotic vaccine rollout.

The UK is to release a mass of data, starting with the latest jobs data on Tuesday. Economists are expecting the unemployment rate to remain stable. Inflation data on Wednesday is expected to tick higher while PMI data the same data is expected to show the dominant services sector rebounding on optimism about the reopening.

Retail sales figures out on Friday are expected to show a partial recovery following a steep drop in January. All the reports taken together could indicate that the UK economy is emerging from the worst of the pandemic crisis.

--Reuters contributed to this report

Top 5 Things to Watch in Markets in the Week Ahead
 

Related Articles

Wall Street ends sharply higher, fueled by Apple
Wall Street ends sharply higher, fueled by Apple By Reuters - May 18, 2022

By Noel Randewich and Amruta Khandekar (Reuters) - Wall Street finished sharply higher on Tuesday, lifted by Apple, Tesla (NASDAQ:TSLA) and other megacap growth stocks after...

Dollar slips as risk appetite returns
Dollar slips as risk appetite returns By Reuters - May 18, 2022

By Saqib Iqbal Ahmed NEW YORK (Reuters) -The dollar fell for a third straight day on Tuesday, pulling back from a two-decade high against a basket of major peers, as an uptick in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Terry Ryan
Terry Ryan Mar 25, 2021 7:12
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Not that positive on the outlook.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email