Market Forecasts for January 25-29

This week’s main events include the FOMC and GDP for Q4. Equities have rallied by the end of last week but markets could still start falling again if economic data fall short of expectations. Those who trade stocks should keep in mind we are also in the midst of earning season. So stocks traded in the market could also be affected by surprises to the EPS as well as changes in guidance for 2016. Let’s breakdown the main items for the week of January 25-29.  

(All times GMT):

Wednesday 15:00 – U.S. New Home Sales: This report will refer to December; in the previous report (opens pdf), the sales of new homes declined to an annual rate of 490,000; current estimates are for a faster growth with an annual rate of 503,000;

Wednesday 15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on January 22nd;

Wednesday 19:30 – FOMC Meeting and Press Conference: This is the first meeting of the year and considering the bearish market sentiment, strong appreciation of the U.S. dollar and concerns over China’s economic woes, the Fed is likely to refer to all these issues in this meeting. This meeting doesn’t include a press conference or revised outlook, so the statement will be the main event. Given the current market sentiment, people expect a dovish statement and perhaps a bit of backpedaling from the Fed’s previous hawkish statement;

Thursday 13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the changes in the initial jobless claims for the week ending on January 22nd; in the previous report, jobless claims rose to 293K; the expectations are  for this number to fall to 281K;

Thursday 13:30 – U.S Core Durable Goods: This monthly report refer to December and will indicate the developments in U.S demand for commodities including oil and gas. As of November  2015, core durable goods slipped by 0.1%, month over month; this time, however, core durable goods are expected to remain flat;

Thursday 15:00 – U.S. Pending Home Sales: This report presents the developments in pending home sales in the U.S during December; in the previous update for November, pending home sales index declined by 0.9% (month-over-month); this time, however, the index is expected to rise by 1.1%;

Friday 10:00 – EU CPI Flash Estimate: This index estimates the yearly consumer price index of the Euro Area. According to the last estimate for December, the annual CPI inched up to 0.2%. The core CPI remained at 0.9%;

Friday 13:30 – Canada’s GDP by Industry: This monthly report presents the developments in major industrial sectors for November 2015. In the previous update regarding October 2015, the real gross domestic product was 0%;

Friday 13:30 – First Estimate of U.S GDP for 4Q 2015: This will be the first estimate of U.S’s Q4 2015 real GDP growth. In the previous estimate for Q3 the GDP grew by 2% — not far off expectations. The current estimates are for the GDP growth rate to fall to 0.8%. A better than expected growth rate could drive higher the U.S. dollar, equities and commodities;

Friday 15:00 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the changes in U.S consumers’ sentiment; according to the last report, the sentiment index rose to 92.6;

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