Investing.com – If last week was already busy, with several major statistics which notably gave rise to a big negative surprise for the NFP report last Friday, this new week will be even more important.
Indeed, investors are eagerly awaiting the Fed meeting on Wednesday evening, and will then pay close attention to the American presidential election at the end of the week.
As for the Fed, a rate cut of 0.25% is widely anticipated. The Investing.com rate barometer currently shows a probability of 99.6% for this scenario. However, the central bank will also provide clues for its upcoming meetings, and these are the ones that will be most likely to impact the markets, knowing that the prospect of a continued rate cut would be positive for the markets.
Investors will be particularly keen to know the Fed’s opinion on the labor market, following the very disappointing NFP report last Friday. If the central bank emphasizes that this is an accident linked to strikes and hurricanes, as several economists have already suggested, speculation on lowering rates could decline, to the detriment of the stock markets.
For the American elections, we can consider that the markets’ favorite candidate is Donald Trump, although this is open to debate. However, the race is visibly tight between Trump and Harris, and the risk is high that a small gap between the two candidates could delay the announcement of the winner. Such uncertainty would obviously be negative for the markets.
When it comes to US corporate earnings, earnings season is in full swing, and many financial updates are expected this week, as you can see in detail on our earnings calendar. The performance of stocks will therefore also depend on the performance of companies, whatever the content of the Fed meeting and the outcome of the US presidential elections.
