Earnings season kicks off this week, and Federal Reserve policymakers have one last opportunity to share information before next month's policy meeting.

Earnings

On Friday, banking giants JPMorgan, Citigroup, and Wells Fargo all topped expectations, benefiting from higher interest rates and reducing worries of stress in the financial system.

Quarter one earnings season kicks off this week, with reports anticipated from several more major banks, including Goldman Sachs, Morgan Stanley, and Bank of America, as well as a range of other corporations, including Netflix, Tesla, IBM, and Johnson & Johnson.

According to Refinitiv data released on Friday, analysts now predict S&P 500 profits to have fallen 4.8% year on year in the first quarter. This compared to their previous week's projection of a 5.2% year-over-year fall in the third quarter.

PMI Data

On Friday, the Eurozone, the United States, and the United Kingdom will report PMI (purchasing managers index) data, and investors will be looking for evidence that the recent crisis in the banking sector is already harming economic development.

The IMF lowered its global growth projection last week, warning that troubles in the banking sector indicated the global economy was more inclined to falter than outperform expectations.

The PMI statistics should indicate whether and how rapidly growth is declining. As central banks are within the conclusion of their tightening cycles, this question is rapidly becoming an important factor for markets.

UK Data

The United Kingdom will report February employment statistics on Tuesday, followed by March inflation data the following day, which might influence whether the BoE decides to raise interest rates by another 25 basis points at its meeting next month.

Inflation surprisingly climbed to 10.4% in February, spurred up by rising food costs, data that likely solidified the case for a rate hike in March. Analysts predict that inflation will return to single digits in March, although this will still be significantly higher than the rate of inflation experienced in the rest of Europe and the United States.

While the British economy avoided a recession, growth has slowed in the last year.

Markets estimate that the BoE will raise interest rates to 4.5% from 4.25% next month, marking the 20th successive rate rise since December 2021.

Federal Reserve

Despite the minutes of the Fed's March meeting recognising the heightened danger of a recession later this year due to recent financial sector instability, the majority of investors believe the Fed will raise rates by an additional 25 basis points at its upcoming policy meeting on May 3rd.

Investors will have one last chance to hear from Fed officials, including New York Fed President John Williams, Governor Michelle Bowman and Governor Lisa Cook, in the coming days before they enter their regular blackout period ahead of the meeting.

The United States will also disclose existing home sales data, a pair of regional manufacturing surveys, and the weekly report on jobless claims, which analysts predict will reveal a further rise amid a spike in layoffs since the start of the year.

(investing.com, reuters.com)