Are markets resilient or rolling? That’s a key question currently on investors’ minds.
That’s especially so given the concerns about the recent high US core CPI inflation print as well as the troubling price action in Bitcoin. In this clip, we stand back from the market noise and look at what the price action is saying about the market. In particular, key equity markets are holding at key levels. Equally many short term market timing models (used for a 1 – 2 week market outlook) have worked off their excess in recent weeks and are back at, or close, to BUY levels. Volatility indices are also are confirming our more positive near term view about equity markets. In the UK, meanwhile, the key equity markets remain in their sideways price pattern of recent weeks.
There’s a lot of key macro data out this week. In Europe that includes various country and European wide consumer confidence indices. Given that the vaccination programs have picked up speed in Europe and given the move towards partially or wholly re-opening economies, those confidence indices should have strengthened last month. The closely watched German IFO survey is published on Tuesday. Elsewhere in Europe, ECB President Lagarde gives a speech on Friday.
In the US key macro data includes the durable goods order release (Thursday), as well as the Chicago PMI and personal income and spending data (both on Friday). In the UK the calendar is light this week. CBI retail sales survey and the government’s monthly borrowing requirements (both Tuesday) are likely to be the macro focus.