ECB remains loose; Earnings & economic data in focus

📰 Eurozone stocks benefited from a still cautious ECB, which is trying to strike a more hawkish tone but still lacks clarity on when to raise interest rates to combat the inflation crisis hitting economies around the world. The ECB left interest rates unchanged but confirmed that it will reduce bond purchases, commonly referred to as quantitative easing (QE), this quarter and end them in the third quarter. The euro was little changed but regained some ground ahead of the ECB's rate decision but will face headwinds – as the ECB remains much more accommodative than most other central banks.

US stocks continue to fluctuate after some of the largest US banks reported mixed results. Warnings from Wells Fargo that loan defaults will increase in the future are weighing on the banking sector. Twitter surged in premarket trading after Tesla CEO Elon Musk offered to buy the social media giant for $54.20 per share in cash, a value of just over $41 billion. That's a 38% premium to the share price the night before, when Musk announced 12 days ago that he had acquired a 9.2% stake in the company. It was a strong unsolicited offer from Musk, who plans to take Twitter private. Tesla fell in response as the CEO appears to be taking another backpack on his shoulders.

The yen recovered from a two-decade low against the dollar. The dollar was little changed after snapping its longest winning streak since 2020 yesterday. Oil prices eased back after rising yesterday on rising geopolitical tensions and China's announcement that it would ease some restrictions. The energy sector, which had a strong performance yesterday, will face some headwinds.

We currently see markets stabilizing and forgetting some of the massive risks and uncertainties, as well as tighter monetary conditions going forward. While many analysts remain optimistic, I still see more reasons for stocks to fall than rise in the coming weeks. However, near-term moves will be heavily influenced by the ongoing earnings season.

Retail sales in the US rose 0.5% in March (but were slightly below expectations). I do not view the higher retail sales as a positive signal, as much of these sales are due to an increase in gas station receipts. In fact, the combination of higher fuel/energy prices and decades of high inflation will continue to erode disposable income and could be one of the driving factors for equities (especially cyclicals) to face headwinds in the coming weeks/in 2022.

China is expected to cut its key interest rate tomorrow for the second time this year, which could help Chinese equities rally. Most markets will be closed tomorrow due to Good Friday.


🇺🇸 US Markets ↕️/↗️
Cyclical Stocks ↕️/↗️
Financial Stocks ➡️
Energy Stocks ➡️/↘️
Tech/Growth Stocks ➡️/↗️

💱 Forex Markets 
EUR, CHF, JPY, AUD ➡️/↘️

⚒ Commodity Markets ➡️/↘️
Oil prices ➡️/↘️
Gas prices ➡️
Metal prices ➡️/↘️
Precious Metals ➡️

⚡️Crypto Market ➡️/↗️

(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)

Yours, Robert 💶📉🏭📊🔍