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Before The Bell 14/04/2019

By: Vincent Lin


Equities:

The S&P 500 edged higher last week, the index is now up 16 per cent on the year, bouncing back from the crash, it is now trading 1 percent below a record high. For stock managers that climb out of the crash, the temptation now is to take the money and run. The stock market is currently at a high P/E ratio. A lot of this rally is driven by the Fed’s pivot towards a more dovish policy, and it is questionable it will be sustained throughout the year.

Coming up this week, global financial institutions including Citigroup and Goldman Sachs will release their quarterly earnings reports, it will shed a light on the current economic conditions. Additionally, China has been the main driver of the global economy for the past decade. Despite the slowdown that the country experienced last year, its economic data has been robust at the start of this year. China is expected to release its first-quarter GDP data on April 17, and it will be a good indicator of the global economy heading forward.

Lastly, back at home, Australia is set to release its employment change and unemployment rate on April 18.

Commodities:

OPEC and its allies will meet in Vienna on April 17-18 to decide on their output policy. However, there is a possibility that the decision will be extended to June.

Forex:

As U.S. and China come closer to the ‘final round’’ of the trade talks, Donald Trump is turning his gun to Japan. Japan has a $69 billion trade surplus with the U.S. – nearly two-thirds of it is from auto-exports, and the President has made it clear he is not happy with it. Japan-U.S. talks set for April 15 – 16, Treasury Secretary Steven Mnuchin suggests the discussion will also cover possible currency manipulation issues.


Sources: Bloomberg, Reuters, DailyFX

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