In a significant week for Central Banks worldwide, key interest rate decisions have reshaped the investing landscape for the year ahead. The Bank of Japan’s move to increase rates for the first time in 17 years marked a historic shift, ending the longest negative rates policy. However, the market response was unexpected, with the Japanese Yen plummeting post-decision, reaching a crucial 150 level.
On the contrary, the Swiss National Bank (SNB) surprised markets with a rate cut, making Switzerland the first developed nation to pivot during the current cycle. Meanwhile, the US stock market hit new highs following the Federal Reserve’s affirmation of three projected interest rate cuts this year, despite persistent inflation figures.
Investors are now giving an 80% probability to all major central banks – the Fed, ECB, and BoE – for implementing a 25bps rate cut by June.
Looking ahead, the focus shifts to next week, specifically to the Initial Jobless Claims report expected on Wednesday. Last week saw a decline in Americans filing for unemployment benefits, a trend in the range of 200,000 to 213,000 since February. Companies are retaining employees amidst challenges in hiring during and post the COVID-19 pandemic.
Additionally, the upcoming revision of the US Gross Domestic Product (GDP) report for the fourth quarter is set for release on March 28. The market will be closely watching the Federal Reserve’s key inflation measure, the Personal Consumption Expenditures (PCE) price index expected to soften in February.
Walgreens Boots Alliance is gearing up to announce its Q2 earnings for fiscal year 2024 on March 28, with analysts forecasting an EPS of $0.83 and revenues of $35.85 billion. In contrast, Carnival is scheduled to reveal its Q1/24 earnings on Wednesday, with Wall Street expecting an EPS of ($0.18) and revenue of $5.4 billion.
While optimism surrounds Carnival’s recovery in 2024, disparity exists in the stock’s valuation. Our Fair Value assessment indicates a potential decline, contrary to analyst projections, emphasizing the importance of thorough research before making investment decisions.
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