Week Ahead: Nonfarm payrolls, FOMC meeting, Apple earnings – markets set for busy week ahead.

Apple Earnings

Earnings season continues apace on Wall Street and on Tuesday it’s the big one: Apple. Shares in Apple continue to hit record highs with the stock one of the prime drivers of the Nasdaq’s ascent this year as promises of tax reform boost sentiment. But can it continue to post record-breaking EPS?

Last quarter Apple defied gravity and posted record first quarter results. But this quarter could disappoint – UBS and JPMorgan have both warned that near-term results from the company could be below expectations. But with all eyes on the next iPhone refresh it may be that investors will overlook soggy numbers this time.

NFP

Friday’s nonfarm payrolls will yield the usual influence on Treasury and forex markets as investors look to this key data for an indication about the future path of monetary policy in the US.

Figures for March were a big disappointment – 98,000 was well below the recent average. But so far that’s not dissuaded the market from thinking the Fed will probably hike rates again at its June meeting.

Federal Reserve

Ahead of the NFP figures there is the not insignificant matter of the Federal Open Market Committee (FOMC) meeting on Wednesday. Markets don’t expect this to be a live meeting, with CME Group’s FedWatch tool indicating just a 5% chance policymakers will raise rates this week. The consensus is for the next move higher to come in June, which places the emphasis for Treasury and currency markets on Friday’s NFP release.

FTSE Heavyweights

In the UK there are updates from three of the FTSE 100’s largest companies by market capitalisation – Royal Dutch Shell, BP and HSBC. Combined these shares account for more than 20% of the blue chip index by weighting. Other large caps to report this week include Shire and Imperial Brands, while we have trading updates from supermarkets J Sainsbury and Morrisons.

Oil

Oil is back in focus as we look ahead to OPEC’s meeting later in May and whether the cartel can agree to extend production cuts to counteract a continued supply glut. Weekly crude oil inventories on Wednesday are the highlight but also expect continued speculation around OPEC’s willingness to continue lowering output to boost prices. Over a two-week period in April Nymex crude futures slipped nearly 10% amid signs that US shale production is surging.

Source: ETX Capital

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