There is no question about what the main story will be this week – however, will equities be able to find any sustained relief from the coronavirus recession fears that have caused such costly market chaos?
US: Stimulus plan?
Donald Trump went from market hero to villain in the space of a few days last week, giving investors hope by promising a ‘major’ stimulus package, before prompting the worst session for 33 years by banning travel from the 26 states that make up Europe’s Schengen Area.
Ever the wildcard, what the President decides to do this week will likely prove to be crucial in dictating what state the markets end up in. Any further drastic measures, like the travel ban, could spark another sharp sell-off. The implementation of the much-talked about, but yet to be delivered, stimulus plan, however, might give investors an injection of confidence when they need it most.
In terms of data, investors may have to deal with a wave of alarming figures. The Chinese fixed asset investment, industrial production and retail sales readings arrive on Monday morning, numbers that may well set the scene for trading in the early part of the week.
There’s then the Empire State manufacturing figure on Monday afternoon, followed by US retail sales on Tuesday, a potentially very interesting Fed meeting, complete with a fresh set of economic projections. Following that there’s the Philly Fed manufacturing index on Thursday, and the existing home sales on Friday.
UK: Coronovirus containment decision
As the UK waits for the government to make a decision akin to those seen in other European countries, the commodity-heavy FTSE is going to remain in thrall to the overall market sentiment regarding coronavirus.
There’s not a whole load of UK data to get through this week, beyond Tuesday’s latest jobs reports. As for reporting companies, two of the most notable names are Morrisons on Wednesday and Next on Thursday – the former may have some fascinating things to say about food sales in the last couple of weeks.
Eurozone: Grim economic sentiment
The above applies to the Eurozone, where the coronavirus will unavoidably be the one and only focal points. Regarding the economic calendar, one imagines Tuesday’s German and region-wide ZEW economic sentiment readings will paint a grim picture of how investors and analysts are feeling.
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