Wall Street Focuses on US-China Negotiations and April CPI [New York Stock Market Weekly Outlook]

Monitoring the Progress of US-China Negotiations in Switzerland

April CPI to be Released on the 13th, Concerns of Stagflation

The New York Stock Exchange is facing major issues this week (12th-16th) such as the US-China tariff negotiations and the April Consumer Price Index (CPI).

The US and China began tariff negotiations in Geneva, Switzerland, on the 10th (local time). While a settlement is not expected immediately, the stock market may react positively to the start of dialogue between the US and China.

On the 13th, the US April Consumer Price Index (CPI) will be released. It is expected to provide new clues about the inflation trend, and on the 15th, the April retail sales figures will show consumer spending trends. As Jerome Powell, Chairman of the US Federal Reserve (Fed), mentioned after the Federal Open Market Committee (FOMC) on the 7th that unemployment and inflation are rising, the market's attention is focused on the April price index.

Matthew Miskin, Co-Chief Investment Strategist at John Hancock Investment Management, warned, "If the CPI comes out higher than expected and retail sales are sluggish, it could raise concerns about 'stagflation,' where recession and high inflation occur simultaneously."

Next week, in addition to economic indicators, US corporate earnings announcements will continue. In particular, the earnings announcement of major retailer Walmart is expected to be a gauge of consumer flow and import product price trends.

Meanwhile, on Wall Street, companies in the consumer staples and utilities sectors, traditionally considered defensive stocks, are being highlighted recently. Although the S&P 500 index has fallen by 3.7% this year, the consumer staples and utilities sectors have risen by 5% and 5.6%, respectively. Chuck Carlson, CEO of Horizon Investment Services, told Reuters, "If the market is in risk-averse mode, these sectors will continue to maintain leadership."

New York = Park Shin-young Correspondent nyusos@hankyung.com