By Noreen Burke
Investing.com-Investors should check if stocks are set for a sustainable recovery, or if further turmoil awaits, as the long-awaited rate hike from the Federal Reserve Board does not get in the way. Will be. Markets continue to monitor headlines The oil market is calm, but concerns about supply shortages are still in the foreground. Here’s what you need to know to start the week:
- Stocks to keep rising?
US stocks soared last week after the Fed implemented its first rate hike since 2018 with a promising valuation of the US economy.
The three major Wall Street indices recorded the highest weekly growth rates since early November 2020, rising 5.5%, 6.2% and 8.2%.
But investors now need to tackle the question of whether the Fed can fight rising inflation without pushing the economy into recession.
JP Morgan predicted last week that the S & P 500 would reach the end of the year at 4,900, about 10% above Friday’s closing price, and the market “now cleared the Fed’s lift-off as expected.”
But concerns over stubborn high inflation, high commodity prices and few signs of the end of the war in Ukraine continue to cloud investors’ outlook.
- Ukrainian war
Market watchers continue to monitor the course of the war in Ukraine, and headlines could cause market turmoil next week as well. Despite ongoing Russian strikes on Ukrainian cities, diplomatic efforts continue.
US President Joe Biden will attend the NATO meeting on Wednesday and the mid-week EU summit in Brussels with the aim of solidifying new ties with European allies.
The West is at risk of a crack between China and India, which has not condemned Russia’s invasion of Ukraine.
On Friday, Biden warned his Chinese responder Xi Jinping about the “results” if Beijing provided material support for Russia’s invasion of Ukraine.
China has expressed concern about the war, but has not blamed Russia’s actions.
China’s State Minister for Foreign Affairs said on Saturday that Western sanctions on Russia were “outrageous.”
On Monday, the Fed Chair Jerome talks about the economic outlook at the National Association for Business Economics’ annual meeting less than a week after the Fed launches what is expected to be an aggressive monetary tightening cycle. It has become.
On Wednesday, Powell will participate in a virtual panel discussion at the Summit hosted by the Bank for International Settlements.
Other Fed officials such as New York Fed President John Williams, San Francisco Fed President Mary Daily, Cleveland Fed President Loretta Mester, Minneapolis Fed President Neel Kashkari, Christopher Waller Fed President, Charles Chicago Fed President Will also give a speech this week. Evans.
The US economic calendar is relatively light, with both ,,,, and data reports.
- Oil price
Oil prices fell for the second straight week last week, dropping about 4% at the end of the week.
Oil prices are on a roller coaster and reached their highest levels in 14 years two weeks ago. This is being boosted by supply shortages from traders, who avoid Russia’s barrels and have declining oil reserves.
However, concerns over demand after the surge in coronavirus infections in China have put pressure on prices, and the stagnation of nuclear negotiations with Iran has become a wildcard in the market.
The International Energy Agency said the oil market could lose 3 million barrels / day of Russian oil from April. The loss will be much greater than the expected decline in demand due to rising fuel prices, the IEA said.
The crisis in Ukraine exacerbated the problem of limited capacity. The IEA says the world is facing a supply shortage of 700,000 barrels per day in the second quarter.
- Eurozone, UK PMI
Will release PMI data for March, which is a kind of Lithomas test of the effects of the war in Ukraine.
In general, PMI is above the 50 point that separates shrinkage and expansion, but after the ZEW index showed German investor morale in March, the eurozone’s largest economic recession cannot be ruled out.
The market has evaded the slump in the ZEW index and instead focused on central bank efforts to curb inflation.
But as soaring energy costs put pressure on household spending, weak batches of PMI can sound a warning.
-Reuters contributed to this report