The top 3 things to watch in the markets next week:
1. European Central Bank Interest Rate Decision:
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The European Central Bank (ECB) is likely to become the first major central bank to cut interest rates in this cycle on Thursday. Market watchers will focus on what ECB President Christine Lagarde has to say.
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Inflation in the services sector remains higher than desired, while wage growth accelerated in the last quarter. Markets still expect the ECB to cut interest rates several times this year, compared to the Federal Reserve and the Bank of England.
2. OPEC Production Cuts:
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OPEC+ is likely to agree today, Sunday, to extend its significant oil production cuts until 2024 and possibly 2025, as the group seeks to support the market amid sluggish global demand growth, rising interest rates, and increasing U.S. oil production. Concerns about slow demand growth in China, the world’s largest oil importer, have also impacted prices. Oil market analysts expect OPEC+ to extend the cuts to balance supplies.
3. Dow Jones Transportation Average:
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Despite all three major U.S. stock indices posting losses last week, they ended the month higher, with the S&P 500 rising about 4.8%, the Nasdaq jumping 6.9%, and the Dow Jones increasing by 2.4%.
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The Dow Jones Transportation Average, however, has fallen about 5% so far this year. Some investors have said that the struggles faced by the transportation index, which includes 20 stocks from rail operators, airlines, parcel shipping companies, and truckers, could indicate weakness in the economy.
