What will drive markets this week?
Stocks finished slightly higher last Friday, but Wall Street ended the volatile week lower with the tech-heavy Nasdaq Composite booking its sharpest weekly loss since March 20. In Europe, stocks were supported by M&A activity. This week, several central banks, including the U.S. Federal Reserve have policy meetings. The market could remain caught in a volatile trading pattern, as investors focus on the Fed, the economy, and the election.
Central Bank Round-Up
As much of the world worries about a “second wave” of COVID-19 infections slowing the economic recovery, we’ll hear what three of the largest central banks are thinking this week. On Wednesday, both the U.S. Federal Reserve and the Bank of Japan announce interest rates, and the Fed also gives its press conference. The Fed will be holding its last meeting before the presidential election, and while it’s likely to sound dovish, it may not give markets the details on a policy that investors want to hear.
On Thursday, the Bank of Japan gives its press conference while the Bank of England gives its own interest rate decision and press conference. Significant current events are facing all nations. The market will also see how both the industrial production and retail sectors of the economy performed last month.
China, Japan, the Eurozone, and the United States all announce industrial production in the upcoming week. Note that China and the U.S. will be announcing August numbers, while Japan and the Eurozone will be announcing July numbers, so don’t go comparing apples to oranges. That said, this key indicator can help show the pace of the global recovery.
An even more important indicator than industrial production here in the U.S. is retail sales. The U.S., U.K., and Canada all report retail sales this upcoming week.
Monday, September 14:
- Chinese Industrial Production (August)
- Chinese Unemployment
- Indian Consumer Price Index (CPI) (August)
- Eurozone Industrial Production (July)
- Japanese Industrial Production (July)
- Japanese Liberal Democratic Party Elects a New Party Leader
Tuesday, September 15:
- U.K. Average Earnings Index (July)
- U.K. Unemployment Claimant Count Change (August)
- German ZEW Economic Sentiment Index (September)
- Eurozone ZEW Economic Sentiment Index (September)
- U.S. Industrial Production (August)
Wednesday, September 16:
- U.S. Retail Sales (August)
- U.S. Federal Reserve Interest Rate Decision and Federal Open Markets Committee Statement (FOMC)
- Bank of Japan Interest Rate Decision
- Japanese Parliament Votes to Install a New Prime Minister
Thursday, September 17:
- Bank of Japan Monetary Policy Statement and Press Conference.
- Eurozone Consumer Price Index (August)
- Bank of England Interest Rate Decision (September)
- U.S. Building Permits (August)
- Philadelphia Fed Manufacturing Index (September)
Friday, September 18:
- U.K. Retail Sales (August)
- Canadian Retail Sales (August)
- Preliminary Michigan Consumer Expectation and Sentiment (September)
- Quadruple Witching Options Expiration Occurs.