US jobs, central banks meeting in Australia, the EU and UK, GDP for the Eurozone, Russian tensions in Ukraine, cranky markets – it’s shaping up as another busy week for investors to struggle with.
Start of month surveys of manufacturing and service sector activity tomorrow and Wednesday (China’s two surveys were issued on Sunday ahead of the start of the Lunar New Year on Tuesday and the week-long break) will give us an idea of how Covid omicron is hitting business.
After the first month of trading for the new year, it sounds like the coming week (with the Lunar New Year shutting much of Asia this week, especially mainland China) will be more of the same song – ‘the 2022 blues’.
But there was a decent bounce in US, Australian and Japanese shares at the end of the week from oversold conditions helped by Apple’s earnings beat while Friday’s key US PCE inflation reading for December (favoured by the Fed) reassured worried investors by not surprising on the upside.
The RBA meeting tomorrow, speech the next day by Governor Philip Lowe and the first updated economic forecasts from the central bank in Friday’s Statement on Monetary Policy will dominate markets and discussion this week in Australia (see separate story).
In the US the January jobs data is expected to be impacted by omicron with payrolls up a relatively subdued 200,000 but unemployment remaining very low at 3.9%, according to AMP Chief Economist, Shane Oliver.
In other data, omicron disruptions are likely to see the January manufacturing conditions index (tomorrow) and the services survey (Thursday) pull back but job openings for December (Tuesday) is likely to have remained strong.
US earnings continue to be released, with figures from Amazon, Meta (Facebook), and Alphabet (Google). So far 34% of US S&P 500 companies have reported December quarter earnings with 77% beating expectations (compared to a norm of 76%) and consensus earnings growth expectations have been revised up to 23% year on year.
Other companies reporting include Ford, General Motors, Exxon Mobil, Shell, PayPal, UBS, Softbank, Loews, Nomura, Activision Blizzard, Ali Lilly, Novartis, UPS, Honeywell, AMD, Starbucks, Chubb, News Corp, Spotify, Fox, Tyson Foods, Snap, Qualcomm, ICE and more.
In Europe, GDP data for the final quarter of 2021 will be issued tomorrow and growth is expected to be strong, but weaker than the 2.2% quarter on quarter rate in the September quarter with France and Spain already revealing better than expected figures.
Data on inflation and employment in January will be released later today.
The European Central Bank will not make a move on rates at its meeting on Thursday, but across the Channel, The Bank of England is expected to lift rates.
In Asia, the Lunar New Year holiday will dominate China, Taiwan, Hong Kong, South Korea, Singapore and parts of other countries for parts of the week.
