Look ahead 3/11/23: China PMI, US jobs; BMW earnings
After another week driven by earnings, things mostly wind down on Friday. One stock to watch is German automaker BMW. It is reporting third-quarter earnings in the wake of good numbers out from French automaking rival Stellantis.
(Video Transcript Summary)
China’s PMI data shows signs of growth
Jeremy Naylor takes a look at important events and trading ideas to keep an eye on for Friday. Firstly, we are seeing positive signs from China's Caixin Services purchasing managers’ index (PMI), with the expectation of growth in October. This suggests that the Chinese economy is bouncing back, which could have an impact on the Chinese yuan's value against the US dollar.
In Germany, trade numbers indicate a decrease in exports but an increase in imports. This has affected the euro's value against the Japanese yen, with the euro breaking the 160 level. This could put downward pressure on the euro against other currencies as well. The German trade balance for September will give us more insight into this situation.
Private payrolls higher than previous month
The non-farm payrolls data is important because it helps us gauge the health of the job market. The recent private payrolls number showed a slight disappointment but was still stronger than the previous month.
In terms of the ISM services PMI data, the dollar basket is an interesting trade as it has pulled back from the recent Federal Reserve (Fed) decision. Technical analysis suggests a potential market top, so if the dollar basket's support line is broken, it could be a good opportunity for a short trade.
Gaza turmoil could limit supply, raise prices
Oil prices and their relation to inflation are also worth noting. The Baker Hughes rig count will be released, and the West Texas Intermediate (WTI) weekly US crude chart has fallen below an important support line.
Concerns about lower demand for oil have been putting pressure on prices, but there could be potential supply constraints due to the situation in Gaza that may push prices upward.
Can BMW rise above global pressures?
Lastly, we have BMW's earnings for the third quarter. After positive results from Stellantis, it will be interesting to see how BMW performs. Stellantis faced some challenges in the US due to strikes in the auto industry, but BMW's global presence makes it an intriguing stock to watch.
Overall, if US markets perform well and earnings reports for Apple and Coinbase Global are positive, we could end the week on a high note for the market indices.
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