[Screen shows “Weekly Market Outlook with Jeffrey Kleintop”]
[Jeff holds up illustration of George Washington]
From the minutes to the latest Fed and ECB meetings, to the preliminary February purchasing managers’ indexes that may confirm the long-awaited end of the global manufacturing recession, to a rate cut in China, and earnings from the most “magnificent” of the Seven, I’m Jeff Kleintop with 90 seconds on what you need to know for the holiday shortened week ahead.
The minutes by the Fed and ECB this week
[Jeff holds up illustration of a gavel and block]
may signal the market is correct in pricing in the start of rate cuts by the ECB before the Fed. The minutes of the January Fed meeting out Wednesday, may offer insight into why officials lacked the confidence needed to signal the start of rate cuts in March. And the ECB minutes of the January meeting, released on Thursday, may provide more insight into why President Lagarde said that the Governing Council thought January was premature to discuss cuts, but also refrained from ruling out a cut at coming meetings.
The Peoples' Bank of China cut rates on Monday
[Jeff holds up illustration of a man holding a bag, labelled "Rate Cut"]
the first cut since last August. The economy needs support, with both inflation turning negative and the official manufacturing PMI in contractionary territory both for the past four months. Additional policy measures are needed to address China’s property problems which are holding back consumer spending.
The preliminary February purchasing managers' index readings
[Jeff holds up illustration of a cardboard box, with arrow pointed downward]
for the U.S., Germany, France, Japan, U.K. and other countries are released on Thursday after the global manufacturing PMI climbed to 50.0 in January. That’s the threshold between expansion and recession for the manufacturing sector. A February reading above 50.0 may confirm an end to the longest downturn in manufacturing since the data began 30 years ago, signaling a recovery from the “Cardboard Box” recession.
Beyond central banks, a key focus for investors this week
[Jeff holds up sign stating "Magnificent 7"]
will be on earnings with the highest-flying member of the so-called Magnificent Seven, Nvidia, reporting on Wednesday. The company will show whether its performance is living up to investors’ high expectations. Outside the U.S., the focus will be on financials including U.K. banks Barclays and Lloyds and Asian banks HSBC and Standard Chartered which may spell out the risks to their China property operations.