Brexit, Trump Continue To Cast Shadow Over Markets

By Glenn Dyer | More Articles by Glenn Dyer

Brexit, Chinese trade for December and 2018, the US 4th quarter earnings season and the part closure of the US government will dominate events this week.

The US 4th quarter earnings season kicks off this week with a trio of banks and a media giant to dominate reports.

By the end of next week, we will know the state of the heath of the huge US banking sector and whether it will be enough to push Wall Street share prices higher.

The continuing part shutdown of the government by President Trump’s impasse with the Democrats will also grab headlines – will Trump to try to declare a state of emergency to try and get himself off the hook.

He stopped short of such a move on Friday after a number of republican congress members emerged to try and get the government re-opened.

Chipmaker, Micron Technology, streaming video giant, Netflix, and major Wall Street banks Citi, JPMorgan, Goldman Sachs Morgan Stanley, Bank of America Merrill Lynch and Wells Fargo are all down to report their December quarter earnings.

Credit giant, Amex is also due to report and major airlines, Delta and United Continental.

Others due to report include apparel maker, VF Corp, oil services major, Schlumberger, Alcoa, the aluminium group, CSX, the railway company and supermarkets chain, Albertsons.

Citi starts today, with Wells Fargo and JP Morgan on Tuesday, Goldman Sachs and Bank of America on Wednesday and Morgan Stanley on Thursday.

Netflix is due to report on Thursday and will probably dominate the week with a lot of attention on the growth in the number of its subscribers, especially outside the US.

Reuters says earnings expectations remain low nevertheless – forecasts from analysts indicates S&P 500 earnings will be up 14.5% in the fourth quarter of 2018, which would be the slowest since Q3 2017 and sharply lower than the 28.4% rise in Q3 2018 and almost flat year-on-year, meaning no year on year growth.

Brexit dominates events in Europe (and will be watched closely elsewhere as well) with the UK House of Commons due to vote on the exit proposals of Prime Minister Theresa May on Wednesday morning, Sydney time.

Mrs. May’s proposals face defeat, meaning no deal, a hard Brexit, or a new referendum or even a new general election.

China’s December trade data is out later today – data for the full year will be released. Data on commodity imports will hold the greatest interest for Australian investors.

Bank lending data will also be issued later on Monday, and house price data on Wednesday.

In Australia the December 30 reporting season starts in a low key fashion – linked investment companies, Mirrabooka Investments (Wednesday) and Derriwarrh Investments are down to report (Thursday), while the Australian US-based tech giant, Atlassian (Thursday) are due to report.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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