Stocks: What to watch out for this week

European shares are largely in red on Monday, while US stocks have opened lower following a pullback in the futures market.

The S&P 500 is down 1%, the Dow Jones Industrial Average is losing at -0.5% and the Nasdaq Composite has declined 1.5% in early deals across Wall Street.

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The pan-European Stoxx 600 index looks poised to end lower – it’s currently pinned near -0.7%. Elsewhere, UK’s FTSE 100 is also down at -0.6%, while Germany’s DAX had shed 0.9%.

The choppy outlook across the markets comes at the start of a week likely to see increased volatility. Top of the macro factors list are economic reports, central bank meetings and US inflation data. Earnings season is here and that too is something to keep an eye on

Here’s a brief outline of what investors will likely be watching out for this week.

Fed officials speak on Monday

Stocks fell last week as the US Federal Reserve’s indicated it would be taking aggressive measures to handle inflation. Comments by top Fed officials roiled sections of the market, a scenario some observers have termed an “overreaction.”

Well, this week has several Fed officials lined up to speak. The Monday speeches could inject some action into the market.

US inflation data for March

US inflation remains at a 40 year high and data for March expected out on Tuesday is forecast to confirm this.  The consumer price index (CPI) is likely to hit 8.5% year-over-year in March – up from 7.9% in February. Month over month, CPI is expected to climb 1.1% in March.

Overall, the inflation pace is set to hit its highest pace since 1981.

Apart from CPI, investors will also eye major releases on producer prices and retail sales.

Earnings season

The spotlight this week could fall on several market giants as earnings season ushers in Q1 reports. Major reports to watch include banking giants JPMorgan, Goldman Sachs and Wells Fargo as well as US airline Delta Air Lines.

The overall outlook for the large-cap banks is that profits are likely to be significantly lower compared to the same quarter a year ago.  

A decline in activity for the behemoths hinged on events that have unfolded since Russia’s invasion of Ukraine will be a key factor. Investors will want to focus on any upsides related to rising interest rates and a blip in the equities markets.

Briefly, the earnings spotlight on Tuesday, 12 April will be on Albertsons (ACI) and CarMax (KMX). On Wednesday, 13 April investors might want to look out for quarterly results from JPMorgan (JPM), Delta Air Lines (DAL), Bed, Bath & Beyond (BBBY), and BlackRock (BLK).

On Thursday, 14 April, Goldman Sachs (GS), Citigroup (C), Morgan Stanley (MS), Wells Fargo (WFC), and PNC Financial (PNC) will report.

As well as the above factors, the geopolitical situation around Russia’s invasion of Ukraine continues to be a big market driver.