Weekly Outlook (20-24 April)

The COVID-19 developments and its effect on the global economy will remain a focal point among investors in a busy week ahead.

Major indices registered their first back-to-back week of gains since the week ending February 14, before the coronavirus-related selloff began. Nevertheless, market strategists alert that there could be more volatility ahead until meaningful progress is made in containing COVID-19 or a vaccine is found.

As of Sunday evening, there were more than 2.3 million confirmed cases and 164,000 deaths globally, according to Johns Hopkins University data. In the U.S., there were more than 750,000 cases and 40,000 deaths.

Earnings season is underway and, on Tuesday, Netflix reports Q1 results. Amid plenty of speculation as to how the company would be able to play with Disney+ and Apple TV+, Q4 profit beat consensus expectations. Its guidance for Q1 expects to add 7m new subscribers while generating revenue of $5.73bn, and profit of $1.66c a share. With the lockdown keeping people at home, it would be a surprise if Netflix didn’t comfortably beat expectations for Q1, despite it being one of the most expensive options in the TV streaming space.

US labour market suffered over the last four weeks. It’s hoped that the number of job losses in the US could start to pick up. With an unemployment rate likely to surge above 10% in next month’s non-farm payrolls report, US officials will be hoping that the claim numbers start to slow in the coming weeks.

In the UK labour market thing are not different. With 1m applications for universal credit over the past few weeks, the jobless claims number is expected to skyrocket next months.

Manufacturing & services flash PMIs in Germany/France/UK are likely to be worse in April, given the lockdown of the economies.

Key data to keep an eye on include:
Tuesday: UK jobless claims (March), Netflix Q1 results
Thursday: Germany/France/UK manufacturing & services flash PMIs (April), US weekly jobless claims
Friday: UK retail sales (March): Collapse is expected for all types of retail, except for food and other supermarket sales.


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