Scroll down to see last week’s recap.
Events:
Monday, 3rd of April:
- The Swiss CPI (Consumer Price Index) for March is expected to decrease to 0.4%, compared to 0.7% in February. It is a measure of the average change in prices of goods and services purchased by households in a specific region, and it is used as an indicator of inflation or deflation. A positive CPI indicates an increase in the cost of living in Switzerland, while a negative figure suggests a decrease in the price level. This data is closely monitored by the Swiss National Bank (SNB) in its monetary policy decisions, including setting interest rates and managing the exchange rate of the Swiss franc.
- The US ISM Manufacturing PMI for March is expected to decrease from 47.7 to 47.5, compared to February. ISM Manufacturing PMI stands for the Institute for Supply Management Manufacturing Purchasing Managers’ Index. It is an economic indicator that measures the performance of the manufacturing sector in the United States. The PMI is based on a survey of purchasing managers in the manufacturing sector, who are asked about their level of business activity in areas such as new orders, production, employment, supplier deliveries, and inventories. A score above 50 indicates expansion in the manufacturing sector, while a score below 50 indicates contraction. The ISM Manufacturing PMI is considered a leading indicator of the overall health of the US economy, as the manufacturing sector is an important contributor to economic growth and employment.
Tuesday, 4th of April:
- The Australian Cash Rate is expected to rise by 25 basis points, from 3.60% to 3.85%. It is the interest rate at which the Reserve Bank of Australia (RBA) lends or borrows money to or from commercial banks in the overnight money market. The RBA uses the cash rate as its key monetary policy tool to influence borrowing costs and the supply of money in the economy, in order to achieve its policy objectives of low inflation, full employment, and economic stability. The cash rate has a significant impact on financial markets, including currency exchange rates, bond yields, and stock prices, as well as on consumer and business spending and investment decisions.
- The US JOLTS Job Openings survey for February is expected to show a decline from 10.824M to 10.400M, compared to January. JOLTS stands for Job Openings and Labor Turnover Survey. It is a monthly report that provides data on the number of job openings, hires, and separations in the US labor market. The JOLTS report is closely watched by economists and policymakers as it provides insights into the health of the labor market and can indicate trends in hiring and job growth. Job openings refer to the number of available jobs at the end of the month, while hires refer to the number of employees who began working during the month. Separations refer to the number of employees who left their jobs during the month.
Wednesday, 5th of April:
- The New Zealand Official Cash Rate (OCR) is expected to increase by 25 basis points, from 4.75% to 5.00%. It is the interest rate set by the Reserve Bank of New Zealand to meet its inflation target and support sustainable economic growth. The OCR influences the interest rates charged by banks and other financial institutions, which in turn affect borrowing costs for households and businesses. A higher OCR makes borrowing more expensive, which can help reduce inflation, while a lower OCR makes borrowing cheaper, which can stimulate economic activity. The OCR is reviewed and set by the RBNZ eight times a year.
- The US ADP Non-Farm Employment Change for March is expected to decline to 205K, compared to 242K in February. It is a monthly report that measures the estimated change in the number of employed people in the United States (excluding the farming industry) during the previous month, based on payroll data from ADP, a payroll and human resources company. The report is released two days before the official Non-Farm Payrolls report from the US Bureau of Labor Statistics (BLS) and is often used as a leading indicator of the BLS report. The ADP report is closely watched by investors and economists as a key indicator of the health of the US labor market and the overall state of the US economy.
- The US ISM Services PMI for March is expected to decrease to 54.5, compared to 55.1 in February. The Institute for Supply Management Non-Manufacturing Purchasing Managers’ Index is an economic indicator that measures the business activity of the US services sector, which includes industries such as finance, transportation, healthcare, and other non-manufacturing sectors. The index is derived from a monthly survey of purchasing and supply executives and is based on five major components: business activity, new orders, employment, supplier deliveries, and inventory sentiment. A reading above 50 indicates expansion in the services sector, while a reading below 50 indicates contraction. The ISM Services PMI is a leading indicator of the overall health of the US economy, as the services sector accounts for a significant portion of the country’s GDP (Gross Domestic Product).
Thursday, 6th of April:
- The Canadian Employment Change for March is expected to decline to 14.9K, compared to 21.8K in February. It refers to the monthly report that measures the change in the number of employed people in Canada. The Employment Change provides an indication of the health of the Canadian labor market and the overall state of the economy. The report includes data on the number of full-time and part-time jobs added or lost in the previous month, as well as the unemployment rate. A higher-than-expected reading is generally seen as positive for the Canadian dollar, while a lower-than-expected reading is seen as negative.
- The Canadian Unemployment Rate for March is expected to increase to 5.1%, compared to 5.0% in February. It is a measure of the percentage of the total labor force that is unemployed and actively seeking employment but unable to find work. The unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force, which includes both employed and unemployed individuals. The unemployment rate is an important economic indicator as it reflects the health of the job market and can be used to gauge the overall state of the economy. A high unemployment rate can indicate economic weakness, while a low unemployment rate can indicate economic strength.
Friday, 7th of April:
- The US Average Hourly Earnings rate is expected to increase up to 0.3%, compared to the previous 0.2%. It indicates the change in average hourly earnings of all employees on non-farm payrolls in each month compared to the previous month. The Average Hourly Earnings indicator is used to track changes in wage inflation and labor market conditions. A higher reading indicates increasing wage inflation, which may lead to higher consumer spending and inflationary pressure, while a lower reading indicates slowing wage growth, which may signal economic weakness.
- The US Non-Farm Employment Change for March is expected to decline down to 238K, compared to 311K in February. Non-Farm Employment Change is a monthly economic indicator that measures the change in the number of employed individuals in the United States, excluding farm workers, private household employees, and nonprofit organization employees. It is considered an important gauge of the health of the US labor market. A higher number of non-farm employment change indicates that more people have been employed, which can lead to higher consumer spending and economic growth.
Notable Earnings:
Recap from Last Week (27.03.23 – 31.03.23):
- Virgin Orbit’s (VORB) stock plummeted by 40% as it stated in an SEC filing that it would lay off 85% of its employees due to failure to secure adequate funding. Bed Bath & Beyond’s (BBBY) shares dropped by 4.1% as the retailer warned of potential bankruptcy if its $300 million equity offering fails. Nikola’s (NKLA) shares fell 7.3% after announcing its plans to raise $100 million through a secondary public stock offering. Meanwhile, ELF Beauty’s (ELF) stock rose by 1.4%, supported by Morgan Stanley’s ‘overweight’ rating. Lastly, Cintas’ (CTAS) shares fell by 1.4%, after Jefferies downgraded the service company’s rating, while Generac’s (GNRC) stock fell 3.4% due to Bank of America’s downgrade from ‘neutral’ to ‘underperform’ based on unrealistic 2023 guidance.
- Italy’s data protection authority, Garante per la Protezione dei Dati Personali, has banned the use of Microsoft-backed generative AI app ChatGPT in Italy due to violations of Italian data privacy law. The ban was imposed after ChatGPT failed to notify users of a data breach and collected personal data without a legal basis. The move is significant as it is the first blow to the spread of the technology, which has been gaining popularity since its launch last year. OpenAI, the developer of ChatGPT, has 20 days to respond to GPDP’s concerns. The ban comes amid growing concern about the risks associated with the powerful AI tool. Microsoft’s (MSFT) stock dropped 0.3% in premarket trading following the announcement.
- Last week, while facing criticism from the US government over its connections to China and TikTok CEO Shou Zi Chew was being questioned, ByteDance founder Zhang Yiming traveled to Arkansas to meet with Walmart CEO Doug McMillon. The details of the discussion are unknown. Two years ago, Walmart was reportedly in talks with Oracle to buy TikTok’s US operations. Walmart was expected to take a 7.5% stake in TikTok’s US unit, and McMillon was to take a seat on the board. However, the chances of such a deal are now less likely. ByteDance has been opposed to selling its US business in recent weeks, and China has stated that it will “firmly oppose” any such deal. Legislation against TikTok generally calls for a complete ban of the app in the US rather than a divestiture. Last Thursday, Chew’s testimony before Congress was criticized, and the likelihood of an outright ban was estimated at “90%-plus.” Walmart’s (WMT) stock closed higher at $145.68 on Thursday.
- Former President Donald Trump posted “WHERE’S HUNTER?” on Truth Social, a social media platform linked to him, following his indictment by a Manhattan Grand Jury over the Stormy Daniels hush money case. Shares of Digital World Acquisition Corp (DWAC), expected to merge with Truth Social, spiked by nearly 10% at $14.35. Trump has accused Hunter Biden of misdemeanors while his father was in office and alleged that the FBI buried a New York Post story about Hunter introducing his father to a Ukrainian businessman. Trump has also accused Hunter Biden of using his influence to secure financial backing from China for his investments.
- Nikola Inc.’s (NKLA) shares hit an all-time low on Thursday, with the electric and fuel-cell vehicle manufacturer planning to sell $100 million in shares at a 20% discount on that price. Initially, Nikola planned to sell $100 million in shares to the public and an additional $100 million to an undisclosed investor in a direct offering, but the company later revised its terms to a $100 million total, with $1.12 per share for both the public and private offerings. The company’s founder was convicted of securities fraud last year, and the CEO and CFO have recently left the company. Nikola’s stock has fallen 87.4% over the past 12 months and 35.2% year-to-date.
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