© Reuters
Investing.com – Tuesday’s US inflation numbers will be in focus next week, as markets look for clues about the timing of interest rate cuts by the Federal Reserve. While earnings season continues, it appears that oil prices will remain volatile, while the UK and Japan will release economic data that will be closely watched. Here’s what you need to know to start your week.
After recent strong jobs and growth data caused markets to back off bets on the timing of interest rate cuts by the Federal Reserve, all eyes will be on the January inflation report on Tuesday.
Any signs of a price recovery could push bets on interest rate cuts even further in the future.
Economists expect a 0.2% rise in the consumer price index compared to the previous month, compared to a 2.9% annual increase. Core inflation is expected to rise by 3.8% from the previous year.
Market watchers will also get a chance to hear from several Fed officials during the week, including Thomas Barkin – President of the Federal Reserve Bank of Richmond, Raphael Bostic – President of the Federal Reserve Bank of Atlanta, and Mary Daly – President of the Federal Reserve Bank of St. Francisco.
The economic calendar also includes January retail sales figures on Thursday along with the weekly report on initial jobless claims, while a report on producer price inflation and preliminary data on consumer sentiment are due on Friday.
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Profits
Earnings data season continues next week after the 500 index closed above the 5,000 mark for the first time on Friday, and briefly traded above 16,000, supported by higher blue-chip stocks and chip stocks, including Nvidia, along with higher earnings results.
After announcing results for more than two-thirds of companies listed on the Standard & Poor’s 500 index, LSEG data now shows Wall Street’s expectations for fourth-quarter earnings growth of 9.0% versus expectations of 4.7% growth on January 1, while 81% of companies exceeded estimates, compared to the average 76% in the previous four periods, according to Reuters.
Investors will be looking forward to results from Shopify and Marriott on Tuesday, Kraft (NASDAQ: Heinz) and Cisco are scheduled to report on Wednesday, and Wendy’s and Trade Desk will release earnings on Thursday.
Oil prices
Oil prices appear to remain volatile in the coming days after settling higher on Friday, posting weekly gains of 6%.
Prices were boosted by growing concerns about supplies from the Middle East amid the ongoing conflict in the region, and the cessation of American refineries (TADAWUL:) from operating for a significant period, whether planned or unplanned.
The week’s gains came after a 7% loss the previous week.
Jim Ritterbusch, president of Ritterbusch & Co. in Galena, Illinois, told Reuters: “We believe that this type of wide price swings from week to week will characterize markets throughout the rest of this month with the impact of major bullish news coming out of the Middle East that may prompt an adjustment.” Global oil balances.
UK data
The UK will release closely watched jobs, inflation and growth data next week, as investors try to determine the timing of the Bank of England’s first interest rate cut.
Tuesday’s employment report is expected to show wage growth moderating as the labor market slows, but it may still be too high for the Bank of England’s liking.
Wednesday’s CPI data may further complicate the monetary policy outlook. The Bank of England believes inflation will return to its 2% target this year, but warned it could rise again in the third quarter.
Thursday’s GDP data will show how high interest rates continue to impact the economy, which stagnated in the second half of last year.
Japanese GDP
Japan will release preliminary GDP data on Thursday, with growth expected to rebound in the fourth quarter after a contraction in the third quarter as inflation weighed on household spending and a slowdown in business investment.
The data will be closely watched as markets intensify their bets on the Bank of Japan ending its negative interest rate policy, in place since 2016. The Bank of Japan is preparing to end negative interest rates by April.
GDP data is also likely to indicate that the Japanese economy has fallen to fourth place in the world, after the United States, China and Germany.
— Reuters contributed to this report
2024-02-11 18:32:00
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