The Week Ahead

America closes strong; Europe opens strong

U.S. stocks logged sharp gains last Friday, with major indexes shaking off an early slide as technology stocks—notably Apple Inc.—rallied, overshadowing uncertainty over tense trade talks between the U.S. and China and a weaker-than-expected rise in April nonfarm payrolls. The Dow Jones Industrial Average rose 332.36 points, or 1.4%, to end at 24,262.51, recovering from an earlier drop of about 150 points. The S&P 500 index rose 33.69 points, or 1.3%, to finish at 2,663.42 with the Nasdaq Composite Index rising 121.47 points, or 1.7%, to close at 7,209.62,

Meanwhile, European markets started the week in the green and inched higher on Monday, boosted by a round of well-received earnings reports and an advance for heavyweight Nestlé after the consumer goods giant announced a deal to sell Starbucks products worldwide. French stocks, however, headed lower as Air-France-KLM shares tumbled after the group’s chief executive resigned over the weekend amid a dispute over staff salaries.

London markets however are closed on Monday 7th May as the UK enjoys a long-weekend Bank Holiday.

Economic Events

The corporate calendar commences with minutes from the Bank of Japan on Monday 7th May, providing further insight on the latest monetary policy decision. Investors will be looking for clues on the timeframe which the Bank expects to reach its inflation targets within. At the April 27 rate review, the BOJ also issued new forecasts projecting inflation will hit 1.8 percent in fiscal 2019 and 2020 – meaning inflation would fall short of the target for another three years.

Thursday 10th May will see reports on the UK Trade Deficit for March, with economists expecting to see the deficit increase to £2.9 billion from £0.9 billion. Later that day, investors will also be looking out for the Bank of England’s rate decision. The Bank is expected to leave rates at 0.5%, after Mark Carney’s recent comments changed the market’s expectations. Economists expect no change on the UK’s Quantitative Easing programme.

Corporate Events

Earnings season carries on strong with a number of companies due to report their numbers this week. One name to watch out for are Walt Disney, which will be releasing its numbers for the second fiscal quarter on Tuesday, 8th May after the market closes.

Another name finding itself in traders’ diaries is Nvidia Corp., which is due to report its Q2 earnings on Thursday 10th May with analysts expecting the company to beat Wall Street estimates.