Welcome to “The Week Ahead” where each Friday we take a moment to provide our thoughts on what we can expect in markets and the economy for the upcoming week.
Looking beyond our borders next week, investors will be focused on the upcoming European Central Bank meeting next Thursday. Their current asset purchase program is scheduled to expire in December and expectations are that the ECB will implement a tapering program versus a hard stop. Just a month ago many economists had been expecting the tapering program announcement at next week’s meeting, however, due to a strengthening Euro and continued weak inflation, the timeline has been pushed to October. Just as we expect rates domestically to increase over time, we expect global rates to follow in a similar path as the ECB begins tapering and eventually raising key interest rates.
Sticking with global economies, global PMI manufacturing surveys were released this morning and of the 25 regions that have reported so far, 19 saw improvements in their manufacturing sectors in August. More importantly, 24 of the 25 countries showed readings of continued manufacturing expansion.
For the last two years we have been bullish on international equities and, given the current financial conditions, continue to remain bullish as we expect the ECB the execute the Fed’s playbook thoughtfully. As global central banks move forward with normalization and volatility increases from historic lows, we continue to emphasize holding additional dry powder and maintaining a diversified portfolio.
Data deck for September 2 – September 8:
|
Date |
Indicator |
Period |
|
September 5 |
Factory Orders |
---- |
|
September 6 |
Trade Balance |
July |
|
September 6 |
ISM Non-Manufacturing Survey |
August |
|
September 6 |
Fed Beige Book |
---- |
|
September 7 |
Initial Jobless Claims |
---- |
|
September 7 |
Non-Farm Productivity |
Q2 |
|
September 7 |
Unit Labor Costs |
Q2 |
|
September 8 |
Wholesale Trade |
July |
|
September 8 |
Consumer Credit |
July |
