March CPI and Bank Earnings Could Signify a Tough Week Ahead


you.S. markets only have a four-day week next week before a holiday weekend, and with major players in the financial sector including JPMorgan, BlackRock and Goldman Sachs set to report earnings and expectations for the consumer price index for March ahead, it could be volatile for several days.

The March CPI is expected to top 7.9%, CNBC reported, and FactSet predicted a decline for the financial sector of $24.2 year-over-year. The combination of the two and the generally heightened volatility seen during earnings season could send markets into another tailspin.

The outlook and performance of the financial sector will be closely watched, as banks traditionally benefit from a rising rate environment, up to a point. With the Fed’s recent interest rate hike and potentially more aggressive rate hikes on the horizon, as well as planned bond phasing as the Fed shrinks its balance sheets, analysts want to see how big banks see the current outlook for businesses and customers.

The March CPI release is highly anticipated for a number of reasons, including how it will set expectations for the Fed’s interest rate hike in May.

“This is big. This is the last key data point before the Fed meeting on May 3,” explained Michael Schumacher, head of macro strategy at Wells Fargo Securities.

Barclays economists estimate that the CPI will have gained another 1.24% in March to reach 8.5% year-on-year, the highest it would have been in more than 40 years, but with the expectations that this is the peak and that inflation will start to decline. after.

“I suspect at the end of next week, with the long weekend coming up, people will want to take the risk off, but I suspect it could be quite a tough ride with CPI before we see that,” said Schumacher.

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For more news, insights and strategy, visit the China Insights Channel.

Learn more at ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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