US stocks dropped on Friday but reported gains for April after expectations of strong earnings report. Here is the list of 3 key events that will shape the global equity markets in the coming week:
1. COVID-19 situation globally
World’s coronavirus caseload has crossed 150 million mark with over 3 million deaths across the world. US tops the chart followed by India and Brazil. The surge in total case numbers have been majorly driven by India as the country witnessed more than 300,000 cases daily for 10 days straight.
2. Stronger than predicted earnings could drive markets higher
The S&P 500 companies in the United States are outperforming forecasts on the first quarter earnings, giving investors more confidence that profit growth will be enough to keep the economy afloat this year. Refinitiv figures show that 87% of S&P 500 companies have beat earnings forecasts and are now expected to have increased 46% in Q1 from the previous year.
3. April Payrolls numbers
The US employment report for April is expected on May 7.
Markets are expecting payroll numbers to reach 1 million in April. The higher numbers are expected on the back of increased hiring as businesses reopen and a fall in unemployment claims.
According to Dow Jones, analysts polled predict that the unemployment rate will decline to 5.8% from 6%, with a consensus estimate of 978,000.
The strong employment growth projections are set against the backdrop of a thriving economy. GDP increased by 6.4% in the first quarter and is forecast to increase by as much as 10% in the second quarter.