June 29, 2022

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– The market will be sensitive to all new data – E24

Next week will provide both figures for industrial activity, the minutes of the latest Federal Reserve meeting, and a number of quarterly results. At the same time, the chief strategist believes that the nervous market will be sensitive to all the new information that comes in.

Erica Dalstow, chief strategist at SEB, believes the market will continue to be volatile next week.
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– The upcoming PMI numbers this week will be important indicators of the economy going forward, says Erica Bloomgren Dalstow, chief strategist at SEB.

The PMI stands for Purchasing Managers Index, which is the Norwegian-language PMI, and says something about whether corporate PMIs expect increased or weak activity in the next month.

On Tuesday, PMI numbers will come from Japan, France, Germany, the United Kingdom, the United States, and the eurozone.

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It will be important to know whether the decline in the industry is accelerating or slowing. The numbers also refer to dividends and delivery, she says.

Dalstrø also adds that the numbers coming on Tuesday may influence developments in the stock markets in the coming week.

turbulence and fluctuations

High inflation, rising interest rates and geopolitical uncertainty due to the war in Ukraine continue to weigh on the markets.

Last week, the broad S&P 500 index ended lower for the seventh consecutive week. The US index hasn’t fallen since 2001 for the same number of weeks in a row. Stock markets had a lot of turmoil and volatility last week, which will be next week, says Erica Dallstroe.

Markets have taken into account the dips we’ve seen, and some negativity has been priced in. But I think most likely the market will remain sensitive to all the new data that is coming in, or comments from central banks, says Dalstow.

For parts of Friday, the S&P 500 was below the limit for what is referred to as a “bear market,” or the Norwegian bear market. This means that the index is down 20 percent from the top. A strong turn in the last minutes caused the pointer to avoid the bear’s seal.

If the index ends up falling into a “bear market,” it will have no practical significance, according to Eric Bruce, chief strategist at Nordea Wealth Management.

– It can have a psychological effect and affect future expectations. But by itself I don’t think it’s an important signal. Bruce told E24 Friday that it’s important to remember that there are many different markets, and that markets other than the S&P have fallen less.

Federal Reserve Minutes

On Wednesday, the Federal Reserve will present the minutes of its previous monetary policy meeting. At the meeting held earlier in May, the US Federal Reserve raised its key interest rate by 0.5 percentage point. For the first time since 2000, the Fed raised more than 0.25 percentage points in one round.

There will be more rate hikes ahead, but Central Bank Governor Jerome Powell also dismissed the prospect of a three-fold rate hike.

The latest meeting minutes will likely set the extra tone toward the next rate hike in June, says Erica Dalstow.

The rise in interest rates is due to the rising inflation in the United States. In April, the annual inflation rate was 8.3 percent compared to the previous year.

The stock exchange is closed on Thursday

Next week also presents quarterly results from a number of companies, including Flyr, Frontline and Play Magnus.

The Oslo stock exchange was closed Thursday for Ascension Day, but most major European stock exchanges are open. Stock exchanges in Stockholm and Copenhagen were also closed.

The US and France provided GDP figures on Thursday and Friday, respectively. On Friday, we also get the US Trade Balance numbers for April.

Turkey’s central bank will present its interest rate decision on Thursday. The country’s economy is going through a crisis, and the inflation rate reached nearly 70 percent in April. In March, the proportion was just over 61 percent.

The World Economic Forum is also holding its annual meeting in Davos from May 22-26.

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