With the easing of geopolitical tensions, the resurgence of hopes for a Fed rate cut, and the push from Apple's large-scale stock buyback program, the US stock market closed strong on Friday, putting an end to a turbulent week.
Looking ahead to next week, the economic data is quite lackluster, and several Federal Reserve officials will give speeches, but in the current atmosphere, it should not cause too much disturbance to the market. Traders will also pay attention to the upcoming monetary policy meetings of the Federal Reserve of Australia and the Bank of England.
In Australia, the debate over whether policymakers have done enough to control inflation is heating up, while the focus in the UK will be on how long it will take to cut interest rates. Meanwhile, the Swedish central bank may announce its interest rate cut decision next Wednesday, becoming the next major central bank to start cutting rates.
On the Federal Reserve's side, investors in the current interest rate futures market believe that the possibility of a rate cut in July has slightly increased, but it is still below 50%. According to data from CME Group, the probability of a rate cut in September has risen to 75%, higher than Thursday's approximately 60%.
Gilard's Chief Investment Officer, Timothy Chubb, commented that the April non farm payroll report eased concerns about the economy accelerating again in the first quarter, but it is still too early to price and cut interest rates, and a single number cannot represent a trend. Overall, the Federal Reserve needs to obtain new evidence.
In terms of financial reports, the first quarter financial reporting season is about to enter its final stage. As of Friday's close, 397 companies in the S&P 500 index have released financial reports, of which 77% have announced performance that exceeds market expectations. Next week, the performance of companies such as Disney, Western Oil, and Arm is relatively noteworthy.
In the foreign exchange market, investors are watching to see if the yen will further weaken, and the recent intervention of the Japanese government has made it more difficult to short the yen. According to market speculation, the Bank of Japan has intervened in exchange rates three times to prevent the collapse of the yen. Bank of America released a research report stating that the Bank of Japan may conduct multiple rounds of intervention in the near future, but the intervention scale will not exceed $65 billion.
Investors and analysts suggest that in the medium to long term, the yen may continue to weaken. The biggest reason for the recent depreciation of the Japanese yen is the huge interest rate spread between Japan and other major economies. Although the Bank of Japan recently raised policy interest rates, the spread is still significant, and it is currently expected that inflation rates will be more sticky than expected, keeping US interest rates at a higher level for a longer period of time.
If the Bank of Japan raises interest rates again, this spread will narrow, but the reduction may be small. Bank of Japan officials have hinted at plans to maintain loose monetary policy.
In terms of geopolitics, the situation in the Middle East is unpredictable. There are reports that Hamas is about to approve a ceasefire proposal, release hostages in stages, and receive support from the United States to withdraw troops. However, Israeli officials have twice denied Israel agreeing to end the war in exchange for a hostage agreement.
Yemeni Hussai armed spokesperson Yahya Sareya issued a statement on Friday, stating that Hussai armed leader Abdul Malik Hussai has ordered the organization to launch attacks on all ships traveling from the Mediterranean to Israeli ports.

Overview of important events next week:
Monday (May 6th): China's April Caixin Service Industry PMI, Eurozone May Sentix Investor Confidence Index, Eurozone March PPI Monthly Rate, Swiss Bank Governor Jordan's Speech, Japan and South Korea Stock Markets Closed
Tuesday (May 7th): From Australia to May 7th, the Federal Reserve of Australia's interest rate decision, Germany's March quarterly adjusted trade account, France's March trade account, China's April foreign exchange reserves, Eurozone March retail sales month rate, Richmond Fed Chairman Barkin's speech on economic prospects, New York Fed Chairman Williams's speech
Wednesday (May 8th): EIA crude oil inventories in the United States for the week ending May 3rd, monthly wholesale sales rate in March, speech by Federal Reserve Vice Chairman Jefferson on the economy, announcement of interest rate decision by the Swedish central bank, and speech by Boston Fed Chairman Collins
Thursday (May 9th): China's April trade account, China's April M2 money supply annual rate, UK to May 9th central bank interest rate decision, US to May 4th initial unemployment claims for the week
Friday (May 10th): Japan's March trade account, UK Q1 GDP annual rate correction, US May one-year inflation rate expectations, European Central Bank releases April monetary policy meeting minutes, Federal Reserve Director Bowman delivers a speech on financial stability risks
Saturday (May 11th): China's April CPI annual rate, Federal Reserve Director Barr delivers a speech