The Week Ahead (30th March – 3rd April) - That's all, folks: Earnings season ends

Reporting season is now over - and what a season it was!

Company news has in many ways been overshadowed by the conflict between the US/Israel and Iran. In our daily coverage we’ve continued our broad coverage of company results while also noting the extraordinary swings in the equity and commodity markets that have occurred during this time.

The VIX Volatility Index has not yet reached the levels seen during the tariff shock last year, but give it some more time and it might yet get there:

Looking ahead to next week, the Easter break for schools in the UK, along with bank holidays on Good Friday and Easter Monday, will see stock exchanges closed and a big reduction in the volume of company news.

It’s also worth noting that this weekend, on Saturday night/Sunday morning (at 1am), clocks will spring forward by an hour. For those following US markets, the gap between New York (Eastern Time) and UK time will revert back to the normal five hours.

There are no major central bank decisions from the BOE, ECB or Federal Reserve scheduled until the end of April. If we can stop watching the military developments at all next week, the only other major piece of macro news is likely to be US Non-farm Payrolls (NFP).

The previous NFP report, for February, was something of a disaster. The US economy shed 92,000 jobs, instead of adding 126,000 jobs as forecast:

Source: tradingeconomics.com

For the March report, released next week, economists have taken a less optimistic stance but are still anticipating 48,000 new jobs. That surely leaves plenty of room to the downside for disappointment - especially considering how energy prices behaved in March?

The US unemployment rate has also been surprising economists by creeping steadily higher (chart via Bloomberg):

While these data points are far from calamitous, they do point to fragility in what remains for now the world’s largest economy.

Perhaps the main positive feature of the US economy is the inflation rate, which has stayed firmly under control at 2.4%. But according to Bloomberg’s monthly survey of economists, inflation forecasts are now being revised higher in light of the conflict with Iran. And in a similar vein, the prospect of an interest rate cut from the Fed has now become more distant.

So the war against Iran is already having some fairly large economic consequences for the United States - if anything can motivate President Trump to end the conflict quickly, perhaps this is it?

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Economic Calendar

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Companies Reporting