US and European stock market futures are trading a bit soft today as investors are on the edge ahead of important economic events that will unfold later in the week. There are two of the most important monetary policy decisions taking place later this week, which will bring all the spotlight to the Federal Reserve and the European Central Bank. It is widely anticipated that the action taken by these banks is bound to bring significant volatility not only in their respective currencies but also in their equity markets as well.
Dow Jones Price Now
But before that, traders are also looking at the economic numbers that will be released in France, Germany, and Spain. Basically, today is the Manufacturing and Service PMI data day, and the numbers will be released not only for the pioneer economies of Europe but also for the US as well. In Europe, the manufacturing and services PMI numbers are still massively struggling, and they are below 50, especially for manufacturing. The trend is also quite similar for the US, as the forecast for the Manufacturing PMI in the US is for 46.1, while the previous reading came in at 46.3. As for the US Services PMI data, this number seems to be more positive and full of momentum; the forecast for this data set is 54.0, while the previous number printed a reading of 54.4.
The reason that these numbers are still expected to come in on the soft side and are likely to remain that way is that threats of recession are still very real and economic activity is very much slowing down while central banks are keeping a close eye on their task of taming inflation data.
As for the earnings season, it will be in full swing once again. The S&P 500 earnings data shows that companies are still beating EPS estimates by 6.4% in aggregate; however, this number is below the 5-year average of 8.4%. 75% of the S&P 500 companies have reported positive earnings surprises, but the five-year average is 77%. Some of the big names that will be reporting their earnings this week are Alphabet, Airbus, AT&T, Chevron, Exxon, Ford, General Electric, General Motors, GDK, Intel, Mastercard, McDonald’s, Meta Platform, Microsoft, Samsung, Verizon, and Visa. The numbers produced by these companies will also very much make or break the trend in the market.
Gold Prices
Gold prices are going to be highly interesting this week, and investors will be keeping a close eye on the Fed as they will take all the attention on Wednesday, which is when they will announce their monetary policy decision. The price of gold made a two-month high not long ago, and traders believe that the path of least resistance is more skewed to the upside.
Gold Price Chart
The Fed is expected to increase interest rates by another 25 basis points, and the language used by them in their meeting will set the tone for the dollar index, which will influence the price of gold. We believe that this will be the last interest rate hike by the Fed for this year; however, there are speculations that price in at least one more rate hike after this week as the path to the Fed reaching its inflation target continues to remain quite difficult.
Bitcoin Prices
The crypto currency king continues to struggle to move higher despite some decent dollar weakness. The bulls are scratching their heads when it comes to the bitcoin price, and they are concerned about the price action.
Bitcoin Price chart
This is because, in terms of all the positive news that bitcoin can have, it already has such things as Tesla still hosting bitcoin, Bitcoin spot ETFs becoming a reality, and big institutions offering bitcoin to their clients. The softness in the price action is making many wonder if there is actually that massive demand, which many thought there was. Having said this, we continue to remain bullish in terms of the price action as bitcoin represents an alternative form of investing that will only become popular with time.
