Traders' Diary: Everything you need to know for the week ahead

What grabbed the headlines last week?

A global banking system in slightly less crisis.
A realisation that there could be an easing in the current central bank run on interest rate hiking, not least because of a global banking system in crisis.
A bull run on equity markets because of 1 and 2.

Wall Street gained about 2% last week, looking pretty galvanised by the near death experience of 1. and delighted by the impact it had on 2.

It was monkey see monkey do here at home as local markets closed over 3% higher.

Over in Europe it was nothing short of an astonishing week to follow the sudden public immolation of Credit Suisse. EU markets ended up 3.6%.

Even Japan made money last week, closing +2.5% higher on Friday.

Chinese shares which had done well on Schadenfreude the week before fell by 0.1%.

Bond yields have been a right bother but they too rose over the week as 1. became less fraught.

Banking on either banks or regulators looks fraught. For now they’ve stemmed the bleeding, but a history of greed and incompetence should be a useful base measurement and that it’s still way too early to close the case on contagion for this particular outbreak of FINANCIAL-19.

What else?

Chinese economic data out Friday was strong.

Tech giant Alibaba floated plans to split its enormity into six manageable divisions. Here come the IPOs.
Many cheered that as a sign of no more official Communist Party intervention in the brutalised Chinese tech sector.
Those cheers turned quickly to sullen forced golf claps as Communist Party officials signalled their intention to intervene (crackdown) on all sorts of social media, with the surging short video multiverse already in the crosshairs.

So. Onto more reasonable highlights:

The former US President Donald Trump was indicted in New York.

The official charge is “Falsifying Business Records,” but that alleged crime fails entirely to capture the moment, so we’re going with President is being accused of bribing a porn star named Stormy Daniels with hush money payments to not go public about porn stuff with the then presidential-nominee.

For markets, if not for America, this was not a dial-turning event. The fact is this particular ex-President is already facing three legal cases and the odds were good that at least one could go to trial.

To this journalist’s trained eye, the process has all the hallmarks of a classic Palpatine Prequel Manovuer. Mr Trump is already running for the 2024 Presidential election on a platform of grievance and outrage.

Trump supporters would feel pretty grieved and reinvigorated to see their man cuffed and printed and given a mug shot in some New York cop shop.

That pic is going to be huge.

On the ASX

Commodity prices were also mostly higher with oil back up to nearly $80/barrel after declining down to $72 in recent weeks. The $A was up slightly to 0.67 US cents.

And on the ASX last week, it really was all about the commodities, with Gold Stocks again the heroes of the dish.

The XJR ASX 200 Resources index gained 6.9% last week, and the XGD ASX All Ordinaries Gold index added another 6.2%.

That takes the Goldies’ monthly tally to +20.7% in the wake of surging gold prices as, globally, investors sought refuge from the bank kerfuffles that have been unfolding.

That all contributed to the Materials sector’s 7.5% rise since this time last week, and even Energy stocks – which have been in real trouble in recent weeks – managed to turn in a 1.84% rise.

The Energy sector has been hit very hard since the start of the year, however, and remains down 5.6%.

Diana Mousina, the senior economist at AMP Capital, reckons the outlook for equities in the near-term “is constrained.” That’s thanks to war, politics, the old rates stuff and the new banking stuff.

“Global inflation has been surprising to the upside in the US and Europe which may keep central banks more hawkish than expected and the geopolitical environment remains very tense… and the relationship between the US/China is deteriorating again, with further progress on the potential US TikTok ban.”

Wall Street’s silent rockstar of 2023, the Nasdaq 100 charged quietly into a new bull market for the first time since COVID-19 turned out to be the surprise male bovine market of growth almost three years ago. The tech-heavy benchmark on Wednesday hit a more than 20% peak from just after Christmas.

The week ahead

Quiet at home, save for the central bank. Lots of markets including us, New Zealand, China, Singapore, Indonesia, Philippines, India, Germany, Switzerland, France (I don’t know… Norway?), UK, US and Canada will all be taking a knee for the Good Friday (for everyone except maybe Jesus Christ) market holiday.

The turn of the month also brings with a pinch of worldwide PMI data ahead and the punch of a fresh US labour market report.

Central bank meetings will be held in various APAC economies as inflation concerns remain front if a little right of centre. Our lads and lasses at at the Reserve Bank of Australia (RBA) are in position, as are Team Kiwi at the Reserve Bank of New Zealand (RBNZ), and in Delhi the Reserve Bank of India (RBI) will also be making their call on monetary policy.

The focus will also all on what the Fed speakers get up to this week after their March FOMC meet.

The Economic Calendar
Monday April 3 – Friday April 7

Sources: S&P Global, Commsec, Investing.com

Australia

MONDAY
CoreLogic Dwelling Prices
New home loans

TUESDAY
Australia RBA Cash Rate

WEDNESDAY
RBA Governor Dr P. Lowe Speech

THURSDAY
RBA Financial Stability Review
ABS Trade Balance

FRIDAY
Market Holiday

Global

MONDAY
Taiwan Market Holiday
Worldwide Manufacturing PMIs and Global PMI
Japan Tankan Survey (Q1)
Indonesia Inflation (Mar)
United States Construction Spending (Feb)
United States ISM Manufacturing PMI (Mar)
Germany Industrial Orders and Manufacturing Output (Feb)

TUESDAY
India, Taiwan Market Holiday
South Korea CPI (Mar)
Germany Trade (Feb)
Happy Birthday Samuel Edwards
Eurozone Producer Prices (Feb)
Canada Trade Balance (Feb)
United States Factory Orders (Feb)
United States JOLTS Job Openings (Feb)

WEDNESDAY
China (Mainland), Hong Kong, Taiwan, Norway, Market Holiday
Worldwide Services, Composite PMIs* (5-6 Apr)
New Zealand Cash Rate (5 Apr)
United States ADP National Employment (Mar)
United States International Trade (Feb)

THURSDAY
China (Mainland), Thailand, Philippines, Norway Market Holiday
Hong Kong S&P Global PMI (Mar)
China Caixin Services PMI (Mar)
India Repo and Reverse Repo Rate
Switzerland Unemployment (Mar)
Germany Industrial Output (Feb)
UK Halifax House Prices (Mar)
United States Initial Jobless Claims

FRIDAY
New Zealand, China (Mainland), Hong Kong, Singapore, Indonesia, Philippines, India, Germany, France Switzerland UK, US, Canada Market Holiday
Japan All Household Spending (Feb)
UA Non-Farm Payrolls, Unemployment, Average Earnings (Mar)