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OvalX Weekly Diary - 16 September

The week ahead

The major thing to watch out for next week is the latest Federal Reserve meeting on Wednesday. Speculation over the pace of inflation remains the major driver for volatility in the markets, and the Fed has widely detailed that it has been looking at another 75bp hike at this meeting in order to pull inflation back down towards the two percent target.

As the US CPI data coming is slightly worse than expectations, some speculation has gained the Fed could even move a full one percent. This is still seen as an outlier event, as there are almost as many calls from economists that the Fed does not need to be so aggressive on rates as the risks of a hard landing for the economy could be so significant.

There is another relatively slim selection of corporate news next week, with only really CostCo and General Mills of any real note as they may help us gain understanding on the state of the US consumer. The BoE also announces on Thursday where a 50bp hike is expected.

The equity markets have continued to endure a period of nervousness ever since Jerome Powell made his speech at Jackson Hole. The markets have since gained back much of the summer optimism, with many indices now trading back towards their summer lows. There is an increasing hope, amongst some, that a renewed sense of optimism is building that inflation may have peaked already and that lagging CPI data is yet to pick this up. Will this be able to gather momentum, or will it evaporate as quickly as the summer rally?

The expectation is that on the expected interest rate moves next week the buyers may be able to start to gain some confidence.

Trading calendar

Monday 19 September

Market Holiday in UK – Queen’s Elizabeth II State Funeral

Market Holiday in Japan – Respect for the Aged Day#

Major companies reporting: 

  • Autozone
  • Sthree

Major economic data due:

No major data due

Tuesday 20 September

Major companies reporting:

  • Kingfisher
  • TUI AG
  • Xaar

Major economic data due:

13:30 US August Housing Starts m/m, 1.43m expected (1.45m previous)

Wednesday 21 September

Major companies reporting:

  • General Mills
  • Lennar

Major economic data due:

13:30 FOMC Rate Announcement, 3.13 percent expected (2.38 percent previous)

Thursday 22 September

Major companies reporting:

  • Accenture
  • Cineworld
  • Costco
  • JD Sports

Major economic data due:

12:00 BOE rate decision (+50bp expected)

Friday 23 September

Major companies reporting:

Investec

Major economic data due:

No major data due

Please note that the presented content refers to the Oval group which contains two legal entities: Monecor (London) Limited authorised and regulated by the UK Financial Conduct Authority (FCA) with Financial Services register number 124721. Monecor (Europe) Limited authorised and licensed under the Cyprus Securities and Exchange Commission (‘CySEC’) with license number 096/08.