Welcome to Michael Kramer’s pick of the top three market events to look out for in the week beginning Monday 24 March. 

With the central bank interest rate meetings behind us and earnings season winding down, we’re heading into a quieter week. The slower pace of economic and corporate data releases will give the market a much-needed breather before the news cycle cranks up again in April. That said, even in the relatively light week ahead, the market must still contend with the February readings of the UK consumer price index (CPI) and the US personal consumption expenditures (PCE) price index, the latter being the Federal Reserve’s preferred measure of inflation. 

UK February CPI

Wednesday 26 March
UK inflation’s descent from a 41-year high of 11.1% in October 2022 has stalled – and gone into reverse. Consumer prices increased 3% in the year to January, up from 2.5% in December, while core CPI – which removes volatile food and energy prices – rose 3.7% in January, up from 3.2% the previous month. Both measures of inflation have been edging higher since September. 

With inflation moving in the wrong direction, the Bank of England – which held interest rates at 4.5% on Thursday while warning of global trade uncertainty – may find rate cuts difficult to vote for in the near future. Analysts estimate that in February CPI remained stuck at 3%, well above the Bank of England’s 2% target while core CPI is thought to have eased slightly to 3.5%.

The Bank’s rate hold and talk of a gradual, cautious approach to cuts may have implications for the pound. GBP/USD is hovering around a key resistance level at $1.30 and, more importantly, has formed what appears to be a rising flag pattern on the technical chart, below. Historically, these patterns are consolidation formations, suggesting that either a significant move higher or lower may be imminent. A similar pattern formed in USD/JPY between 3 and 21 October, followed by a sharp rise in the currency pair. Although the timing of a breakout or breakdown is difficult to predict, GBP/USD could be a pair to watch following the release of the UK CPI figures. 

GBP/USD, October 2024 - present

Next full-year results

Thursday 27 March
Analysts expect Next to report that revenue in the second half of its fiscal year rose 1.6% year-on-year to £3.0bn, with pre-tax profit climbing 13.7% to £601.1m. However, per-share earnings are forecast to have declined 9% to approximately £3.58. Analysts also estimate that the FTSE 100-listed retailer’s first-half revenue fell 0.8% to £2.8bn, with pre-tax profit for the period declining 3.3% to £472m.

Although the Next share price is up roughly 8% in the past year at 9,796p a share, it has been trading in a falling megaphone pattern since July as the chart below shows. Within this downtrend, the stock now appears to be nearing a breakout to the upside. However, for any breakout to be confirmed, the stock must climb above 10,150p. This would lift the share price above both the upper boundary of the megaphone pattern and a horizontal resistance level that has been in place since mid-February. 

Conversely, a break below support at 9,550p could indicate that the megaphone pattern remains incomplete, potentially sending the shares towards the lower end of the trading range around 9,000p, and perhaps even lower. Thursday’s results seem set to have a big say on where the stock goes next. 

Next share price, December 2023 - present

US February PCE price index

Friday 28 March
The Fed’s favourite inflation gauge may be on the rise. Economists estimate that headline PCE increased 0.5% month-on-month and 2.7% year-on-year in February, up from the January readings of 0.3% and 2.5%, respectively. Meanwhile, core PCE – which excludes food and energy prices – is expected to have risen 0.4% month-on-month and 2.8% year-on-year, up from 0.3% and 2.6% in January. No wonder, then, that the Fed raised its inflation outlook for 2025 when it held interest rates at a target range of 4.25% to 4.5% on Wednesday.

If the PCE figures come in above or even in line with estimates, we may see some market volatility as traders and investors attempt to figure out how rising inflation might intersect with the Fed’s cautious stance on interest rates and the Trump administration’s apparent desire to slow economic growth in order to bring the cost of borrowing down.

Rising economic uncertainty is likely to continue to be felt in the stock market, particularly given the sharp declines already seen in the S&P 500. The index may have formed a bear flag pattern, as shown on the chart below, suggesting that the next major move could be lower. A break below 5,600 might signal the start of a deeper decline, with a drop below support near 5,500 potentially setting up a fall to 5,400. 

To the upside, the S&P 500 has struggled to break through key resistance levels at 5,700 and the 10-day exponential moving average. Until the index can overcome these hurdles – a challenging prospect – the next significant move for the index seems likely to be downward. Friday’s PCE inflation data could therefore be a source of nervousness for many market participants. 

S&P 500, January 2025 - present

Key economic and company events

The coming week’s major economic announcements and scheduled US and UK company reports include:

Monday 24 March

• Eurozone, France, Germany, UK, US: March flash purchasing managers’ index (PMI) data
• Japan: Bank of Japan interest rate meeting minutes
• Results: No major scheduled earnings announcements

Tuesday 25 March

• Germany: March business sentiment index
• US: March consumer confidence index 
• Results: Bellway (HY), GameStop (Q4), Kingfisher (FY), McCormick & Company (Q1), Smiths Group (HY)

Wednesday 26 March

• Australia: February consumer price index (CPI)
• UK: Spring statement, February CPI
• Results: Chewy (Q4), Cintas (Q3), Dollar Tree (Q4), Jefferies Financial (Q1), Paychex (Q3)

Thursday 27 March

• Japan: March Tokyo CPI
• US: Q4 gross domestic product (GDP), weekly initial jobless claims to 21 March
• Results: Lululemon Athletica (Q4), Next (FY), TD Synnex (Q1)

Friday 28 March

• Eurozone: March business climate index, March consumer confidence index
• Germany: February unemployment rate
• UK: February retail sales, Q4 GDP
• US: February personal consumption expenditures (PCE) price index, March Michigan consumer sentiment index
• Results: No major scheduled earnings announcements

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

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