Sujata Rao gives a look at what’s ahead for markets.

Global growth forecasts are being downgraded by the World Bank (IMF) and banks are already rushing to make their own grim assessments.

“Be prepared for a rough landing.” Deutsche Bank In a Wednesday report, the ETR: was shrilled. Deutsche Chief Economist David Folkerts Landau stated that a U.S. recession in late-2023 was possible, pointing out the possibility of an Fed funds rate between 4.5 and 5%.

Goldman Sachs (NYSE 🙂 warns that the Fed is on a “hard path towards a soft landing”.

Forward indicators from Friday’s PMI data could indicate how poor purchasing managers anticipate things will get. Keep an eye on bond markets (NYSE: JPMorgan) to see how they react to a slowing economy that could lead some rate increases.

Treasury yields on 10-year Treasury bonds fell 11 basis points Wednesday. However, the 2-year/10 year yield curve — a well-known indicator of recession — has fallen back to 25 bps.

Although some of the fall has been reversed, equity markets are still higher. In fact, Nasdaq futures have risen half a percentage following strong earnings from Tesla (NASDAQ).

In reality, earnings season is moving along well. This made Netflix (NASDAQ)’s report so surprising. On Wednesday, shares fell nearly 40% due to falling subscriber numbers. The decline rippled out through the whole streaming sector from Disney to Spotify, (NYSE).

The eurozone’s consumer confidence levels fell further in April according to readings on Thursday.

The central banks have shown little interest in lowering rate rise expectations. Mary Daly from San Francisco Fed, who is normally very dovish, said that there was no case for a rate hike of 50bps or more.

An IMF panel was comprised of Andrew Bailey, Christine Lagarde President of the Bank of England and Jerome Powell, Fed Chairman. The panel will monitor closely their opinions on the inflation/growth tradeoff.

The following are key developments which should give direction to the markets on Thursday

Flash consumer confidence; Eurozone March final HICP

-Russian central bank head Elvira Nabiullina addresses Duma.

Initial jobless claims in the United States/Philadelphia Fed business Index.

-U.S. TIPS auction

European earnings: Nestle announces its margin and sales growth targets in 2022. ABB reports a promising start to 2022. ABB sees big orders jump. Anglo American (LON:) cuts production guidance after 10% Q1 drop

-U.S. earnings: Dow Chemicals, Philip Morris (NYSE:), AT & T, Blackstone (NYSE:), Alaska Air (NYSE:), American Airlines