Employment is taking center stage. U.S. payroll levels were much softer than forecast in March and participation rates remain near historic lows, factors that likely played into the Federal Open Market Committee’s dovish stance as its policy announcement this past week.
In Europe, unemployment levels remain stubbornly high in the euro zone’s peripheral economies, especially among the young, making employment a primary driver of political discourse. This is most visibly manifested in Greek truculence over European Union demands. More than 25 percent of Greece’s working population remains jobless. No improvement is anticipated when the Greek National Statistics service reports February unemployment levels this coming Wednesday. With less than two weeks remaining until Greece’s payment to the International Monetary Fund is due on May 12, Prime Minister Alexis Tsipras and his Syriza-led government is finding itself between a rock and a hard place as his supporters demand that the social safety net remain in place, despite the EU’s demands for austerity.
Monday, May 4: Final HSBC manufacturing purchasing manager index (PMI) levels for April are expected to confirm slowing industrial activity in China. Markit will release manufacturing PMI for primary euro zone economies. March factory orders will be released in the U.S. On the earnings front, suburban Houston–headquartered Anadarko Petroleum Corp. will announce first-quarter results. New York investment bank Cowen and Company recently initiated coverage of the exploration and production segment rating Andarko as a top-three pick, based on Anadarko’s positioning in an oil price recovery.
Tuesday, May 5: The Reserve Bank of Australia, the nation’s central bank, will announce its monthly rate decision. Separately, March trade data from the country will be closely scrutinized for clues on Chinese demand for critical commodity exports, such as iron ore. In Europe, euro zone producer price index levels for March and the European Commission’s tri-annual economic growth forecast report will be among the primary macro drivers of market sentiment. April nonmanufacturing PMI data from the Institute for Supply Management and March trade data will be the biggest economic releases for the day in the U.S. Tuesday’s busy earnings calendar includes first-quarter announcements from hedge fund firm Och-Ziff Capital Management Group and Herbalife, the vertical marketing dietary supplement company that has been the subject of a tug-of-war between activist investors. Global food commodity giant Archer Daniels Midland Company will also report results for the first three months of the year.
Wednesday, May 6: Final April services PMI data comes out in China. Growth in the Chinese service sector has proven more resilient that critical manufacturing segments as the economy there continues to mature. Final Markit services PMI for April will be announced for the major euro zone economies, and the 19-nation currency region in aggregate, with no forecasts for significant change from initial flash readings. With Greece remaining a flashpoint for European market narratives, the release of politically sensitive unemployment data for February there will be of note. Energy Information Administration weekly crude oil inventory data will be released in the U.S. with expectations that a recent moderating trend will continue as more production capacity in North America has recently gone offline. As earnings season continues on at full steam, pharmaceutical behemoth GlaxoSmithKline will report results for the quarter as will Anheuser-Busch InBev, the world’s largest brewer.
Thursday, May 7: All eyes will be on the U.K. on Thursday, as the parliamentary election will be held with Prime Minister David Cameron’s Conservative Party struggling to retain a majority. The latest polls see the ruling party retaining a significant-enough lead to remain in power. More industrial data will emerge for primary EU economies with March factory orders in Germany and output for France as well as French trade figures for the month. In the lead-up to Friday’s monthly labor report, initial jobless claims data for the U.S. may garner more market scrutiny than normal. After Nokia last week reported earnings that fell well short of analysts’ forecasts, the announcement of quarterly results from Alcatel-Lucent, which recently announced a merger deal with the Finnish telecommunications giant, will be carefully watched by arbitragers gauging the likelihood that the deal can be completed. Among the many other companies reporting will be Apollo Global Management and Fortress Investment Group.
Friday, May 8: Critical April trade data from China will be released. March export data registered a 14.6 percent decline year-over-year. In Europe, March trade data for both Germany and the U.K. will be announced. U.K. exports will be of particular interest after last week’s disappointing manufacturing PMI. In the U.S. the Department of Labor monthly employment report will be the main focus of market sentiment, as speculation over the timing of Federal Reserve tightening remains focused on the job market. Macquarie Group, Australia’s largest investment bank, will report quarterly results on Friday. Last month the company began paring back its Asian investment banking teams as tighter competition has hindered the bank’s access to deal flow.
