Four global events that will matter for markets this week

US stocks turned in another monthly gain in April, thanks in large part to the surge early last week powered by the French elections, solid corporate earnings and the anticipation of significant tax cuts. At the same time, the outperforming Nasdaq extended its winning streak to a sixth consecutive month, while the Dow Jones Industrial Average followed close behind, with five of six positive months.

Yet the mood in markets was not as ebullient as the numbers would have you believe.

 

1. After the 100-day mark

Although the 100th day in office -- which President Donald Trump marked on April 29 -- is an arbitrary milestone, this initial period for a new administration attracts a lot of media coverage and commentary. That means it also affects behaviors -- in this case, encouraging a flurry of policy announcements and initiatives. Some were well-prepared and sequenced, others less so.

2. Soft versus hard data

After a week of continued divergence between soft (sentiment/confidence) measures and hard data, investors will pay particular attention to the release on Friday of the April jobs report. Data on employment creation, wages and labor participation will shed light on the underlying health of the consumer -- an issue that has become more important after the data issued last week showed that first-quarter gross domestic product growth reached only 0.7 per cent, its lowest level in three years. 

3. Meeting of the Federal Reserve 

The lagging hard data is to be a subject of discussion when the Federal Open Market Committee, the Fed's policy-making panel, meets this week. Though markets are not expecting any changes in policies, they will be interested in the Fed's signals about the economy -- specifically the extent to which the central bank feels confident seeing through soft patches in data that have included GDP, inflation and retail sales.

4. French elections

The decisive second round of voting on May 7 will put an end to the suspense about who will be the next president of France. And there is a lot at stake: One candidate, Marine Le Pen of the National Front, wishes to upend the existing economic institutional system; the other, Emmanuel Macron, an independent centrist, is promising change within the system.

With the markets having priced in a high probability of a Macron win, there will also ..

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