This was a pivotal week for central banks around the world, with several key interest rate decisions shaking up the investment landscape for the year ahead.
In what was seen as a historic decision, the Bank of Japan raised interest rates for the first time in 17 years, ending the longest period of negative interest rate policy in history. However, the market expected the Bank of Japan to become even more hawkish, and the Japanese yen plummeted after this decision, reaching the crucial 150 yen level.
Conversely, the Swiss National Bank unexpectedly cut interest rates on Thursday, making Switzerland the first developed country to reverse course in the current economic cycle.
In the United States, stock markets rose to new highs after the Federal Reserve maintained its outlook for three interest rate cuts this year despite tough inflation.
Investors are currently giving all three major central banks an 80% chance of implementing their first 25bps rate cut by June.
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So let's take a look at what investors should be watching over the coming week.
1. First unemployment insurance claim
All eyes are now on the report to be released next week, particularly on Wednesday. In an unexpected development, the number of Americans applying for unemployment benefits fell last week.
The number of applications for state unemployment benefits for the week ending March 16 was a seasonally adjusted 210,000, down 2,000 from economists' expectations of 212,000, the Labor Department said.
Since February, the number of insurance claims has remained in the range of 200,000 to 213,000. Despite significant layoffs at the beginning of the year, companies generally retained employees, a trend that can be attributed to employment challenges during and post-pandemic.
2. US GDP revision
Investors will also keep an eye on the revised fourth-quarter U.S. gross domestic product () report, scheduled for release on March 28.
According to the Commerce Department's Bureau of Economic Analysis' second estimate of fourth-quarter GDP growth, GDP grew at an annualized rate of 3.2% last quarter, a slight adjustment from the 3.3% originally reported.
3. PCE inflation
Markets will be closed on Friday due to the Good Friday holiday in the United States, but there will still be some interesting data on the Fed's preferred measure of inflation.
Wall Street expects February data to soften, which could support the Fed's decision to cut rates in the coming months. According to the forecast, the core PCE price index will decline from 0.4% to 0.3% month-on-month.
3. Walgreens profits
Walgreens Boots Alliance (NASDAQ:) is scheduled to report its second quarter 2024 financial results on March 28, before the market opens. Wall Street analysts expect EPS of $0.83 and revenue of $35.85 billion.
In the first quarter, Walgreens Boots Alliance reported revenue that beat analysts' expectations, driven by strong performance in its pharmacy and international business units. The Illinois-based company also cut its quarterly dividend by 48% to $0.25 as it tries to cut costs to offset lower customer discretionary spending and lower contributions from COVID-19 vaccines and testing. And so.
Chief Executive Tim Wentworth said cutting the dividend was “difficult” but necessary to “strengthen our long-term balance sheet and cash position”.
Since the first quarter announcement, the company's stock price has fallen more than 17%.
InvestingPro data highlights a trend in analyst EPS estimates for Walgreens Boots Alliance for the next quarter, with an increase of -32.5% in the past 12 months, from an initial estimate of $1.23 per share to $0.83. This is a major adjustment.
Source: Investing.com
Despite the downward revision to EPS estimates, InvestingPro's fair value analysis suggests the company's stock price could rise by approximately 5.2%.
Source: Investing.com
5. Carnival Revenue
Carnival (NYSE:) is another company scheduled to report earnings. The company is scheduled to announce its 24th quarter first quarter results on Wednesday. Wall Street predicts Carnival's EPS ($0.18) on sales of $5.4 billion.
Early this month, goldman sachs We initiated coverage of Carnival with a Buy rating and $20.00 price target. The analysis comments:
We believe that CCL's setup through 2024 is the best, with CCL also poised for a significant recovery in occupancy going forward (increased exposure to Europe), 1) brand and late-stage revenue improvement, and 2) Regardless, we offer what we consider to be a conservative guide. Increased manageable supply.
In contrast, our fair value assessment indicates that Carnival's stock may be overvalued, predicting a potential downside of 12.4%. This differs significantly from analysts' price targets, which predict approximately 25% growth in the stock's value.
Source: Investing.com
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Disclaimer: This article is written for informational purposes only. This does not constitute an investment solicitation, offer, advice or recommendation and is not intended to encourage the purchase of any assets in any way. We would like to remind investors that the investment decision and associated risk rests with the investor, as any type of asset is evaluated from multiple perspectives and is highly risky.
