US and Eurozone spending and confidence, Best Buy earnings
Welcome to your guide to the week ahead in the markets.
Has COVID-19 peaked?
Markets will of course remain susceptible to news surrounding the COVID-19 outbreak over the coming week. The number of new cases recorded daily had slowed towards the end of last week, but an outbreak in South Korea reignited fears of a global spread. Over 75,000 cases and more than 2,100 fatalities had been reported by the end of the week. An acceleration of cases outside of China could prompt further flights to safety, but otherwise the market seems relatively confident that the outbreak is contained and that stimulus from Beijing and the PBoC will soften the economic hit.
US GDP, durable goods, personal spending
Members of the Federal Reserve were feeling confident about the state of the US economy during their last policy meeting, according to last week’s minutes. The FOMC thinks the outlook has gotten “stronger”, and the coming week offers plenty of data to either challenge or support that view. CB confidence is expected to have ticked higher in January, durable goods orders to have fallen –2%, and core PCE to remain stable on the month. While personal income growth is predicted to have risen, spending is likely to have weakened. A second estimate of Q4 GDP is likely to hold steady at 2.1%.
Eurozone, Germany confidence, flash inflation
The euro could be facing more headwinds this week after sliding to multi-week lows against the pound and multi-year lows against the dollar last week. Sentiment data from Germany and the bloc is expected to soften, mirroring market concerns over the health of the bloc’s economy following some poor industrial data. Flash inflation figures for the Eurozone and Germany are unlikely to make inspiring reading; even if price growth in Germany has strengthened towards the ECB target again, the wider Eurozone reading remains far behind.
Earnings: Best Buy, Bayer
Best Buy reports earnings before the open on February 27th. The stock has put in a strong performance over the last six months, rallying around 40% compared to 15% gains for the retail-wholesale sector and 18% for the S&P 500 index during the same period. Best Buy has delivered 11 earnings beats in the past 12 quarters and beat expectations by over 9% in each of the past two quarters.
Bayer also reports earnings on the 27th. The stock is up 45% from the June 2019 low of 51.90, and was last trading around 75.00.
FTSE in focus on deluge of FY results
Earnings reports will be a key driver of UK stocks over the coming days. A deluge of full-year results for 2019 from blue-chips including Standard Chartered, British American Tobacco, Rio Tinto, Persimmon, Taylor Wimpey, RSA Insurance and Meggitt provide clear risks for the FTSE 100 index over the coming sessions. A slew of reports from FTSE 250 constituents throughout the week could also affect the general sentiment around UK plc.
Heads-Up on Earnings
The following companies are set to publish their quarterly earnings reports this week:
|24th Feb – 09.00 GMT||German IFO Business Climate Index|
|24th Feb||Associated British Foods Pre-Close Trading Statement|
|25th Feb – 12.00 GMT||Manchester United||Q2 2020|
|25th Feb – Pre-Market||Home Depot||Q4 2019|
|26th Feb – 06.00 GMT||Rio Tinto||Q4 2019|
|26th Feb – 08.00 GMT||Danone||Q4 2019|
|26th Feb||Taylor Wimpey||FY 2019|
|26th Feb – Pre-Market||Lowe’s Companies||Q4 2019|
|26th Feb – 15.30 GMT||US EIA Crude Oil Inventories|
|27th Feb – 00.30 GMT||Australia Private Capital Expenditure|
|27th Feb – 04.15 GMT||Standard Chartered||Q4 2019|
|27th Feb – 06.30 GMT||Bayer||Q4 2019|
|27th Feb||Persimmon||Q4 2019|
|27th Feb||RSA Insurance||FY 2019|
|27th Feb – 10.00 GMT||Eurozone Sentiment Survey Results (Consmer, Business, etc)|
|27th Feb – After-Market||Autodesk||Q4 2020|
|27th Feb – 13.30 GMT||US Q4 GDP 2nd Estimate, Durable Goods Orders|
|27th Feb – 15.30 GMT||US EIA Natural Gas Storage|
|27th Feb – Pre-Market||Best Buy||Q4 2020|
|28th Feb – 10.00 GMT||Eurozone Preliminary Inflation|
|28th Feb – 12.30 GMT||US PCE Index, Personal Spending, Personal Income|
|28th Feb – 13.00 GMT||Germany Preliminary Inflation|