No rest for the wicked again this week.

After a lacklustre few weeks, particularly for US equities, stocks had a pretty good week, helped by some decent numbers from 2 of the Mag 7, Alphabet and Microsoft. Helping the tech-heavy Nasdaq index gain around 4% in the past five days of trading. The S&P 500 gained over 2%, the FTSE 100 over 3%, and the Stoxx 50 just under 2%. Bond investors are still not having so much fun as, in some circles, the talk has even moved from when the Fed cuts this year, to if at all, or is there a possibility that another rise is on the cards? The latter feels unlikely. There was some buying of 10-year US treasuries at the end of the week; however, the 2-year yield, the one most sensitive to changes in interest rate sentiment, continues to hover just below 5%. The reluctance of prices to drop back to the Fed’s 2% target was demonstrated once again on Friday as the Personal Consumption Index, as has been the case over the past months, came in ahead of expectations. If only modestly this time.

The markets looked through some rose-tinted glasses one felt in the past week; US growth may have come in weaker than expected for Q1, but the economy is still growing; inflation rates remain stubborn, but some of the components of that are beginning to suggest inflation rates will ever so slowly get back to target. Earnings remain resilient, with almost half of the S&P 500 having reported earnings for the first quarter; blended growth is 3.5%, according to FactSet. Ably assisted by the Mag 7 which continues to deliver superior growth compared to the broader market at more than 11%. UK equities continue to be boosted by corporate activity, as not only did Anglo receive an offer, but Darktrace, the cyber security company, found a suiter in the private equity market from Thomas Bravo. The de-equitisation of the UK market continues.

Commodity prices remain strong, although oil prices have stabilised just under 90 dollars a barrel as the geopolitical headlines subsided. US inventories fell for the first time in five weeks.

This week, all eyes will be on the Federal Reserve as that band of merry men meet on Wednesday. One can safely say it’s a given that the Fed will not do anything this month; the question is more about how Jerome Powell directs the debate and whether June remains a possibility. US wage growth and payroll numbers this week will further influence that debate. There has been some indication that the employment market is weakening in the US.

Hopes for a cut in euro area interest rates remain high in the coming months, and this hope will be tested as first-quarter GDP and April flash CPI inflation are due for the eurozone this week. We also get the release of the Global PMIs at the end of the week. The flash data at the start of last week reflected a slowdown in the US but also a continued recovery in economic activity in Europe. It is a quiet week for the UK economy; the one release, aside from the PMIs, will be the BRC shop price index. Finally Amazon and Apple report earnings this week, along with further marking names.