Market outlook for week 28

China-eu ev tariff solution

The ongoing negotiations between China and the EU regarding electric vehicle tariffs could impact global automakers and related supply chains. If a resolution is reached, expect positive sentiment in EV stocks. Conversely, prolonged uncertainty may lead to cautious trading.

Assets to Watch: Li Auto (LI), Nio (NIO), and other major EV manufacturers.

US manufacturing boom

The US manufacturing sector’s resurgence bodes well for industrial stocks. Companies involved in production, logistics, and materials could benefit. Investors should assess individual firms’ growth prospects.

Assets to Watch: USD pairs, Dow Jones Industrial Average (US30), S&P 500 Index ( US500), The Boeing Company(BA), Ford Motor Company (F).

Fed’s stance on rate cuts

The Federal Reserve’s reluctance to cut rates until inflation stabilizes indicates a cautious approach. Bond markets may react to any hints of rate adjustments. Monitor central bank communications closely.

Assets to Watch: USD pairs, particularly EURUSD and USDJPY, as well as treasury bonds.

Inflation responsibility debate

Economists’ discussions on inflation responsibility add complexity. Investors may seek clarity from policymakers. Expect market volatility if conflicting views persist.

Assets to Watch: Gold (XAUUSD), Bitcoin (BTC).

Critical metal supply concerns

The US's reliance on critical metals and China’s dominance in supply raise questions. Mining and materials stocks tied to rare earth elements may see increased interest. Geopolitical tensions could amplify market reactions.

Assets to Watch: Palladium (XPDUSD), Palladium vs US Dollar, Platinum (XPTUSD)

Conclusion

Worthy of mention is the persisting lag between mainstream media sentiment and market sentiment. Be aware that bullish news reports can produce long rallies, but prices may dip unexpectedly before a trend forms. Timing your entry points will be the biggest challenge for the week.