“The hope going into earnings season was that companies were going to settle the nerves,” said one analyst
There are plenty of corporate updates for London and New York companies in the coming week that should demand investor attention, from Diageo and Dr Martins to Apple, Microsoft and Tesla.
Casting a shadow on all stock markets, however, will be the US Federal Reserve update on Wednesday, with interest rate angst already leading to a correction for the tech-laded Nasdaq index.
Investors are starting to realise that after many years of near-zero interest rates and quantitative easing, it’s time to go back to normal, with the Bank of England following the week after, among five central bank meetings in the coming fortnight.
The big question for the market is how far and how fast they’re likely to hike rates.
MONDAY 24 JAN
Just another macro Monday
As for UK economic data, next week’s numbers will be a window on how omicron has affected the country.
January’s flash services and manufacturing PMIs measure economic activity and forecasts for both are still reasonably optimistic.
Around 53.7 is the consensus for the IHS Markit/CIPS UK Services PMI compared to the recently upward revised 53.6 in December.
Manufacturing PMI is expected to weaken slightly to 57.8 and taken together that gives a composite total for both of around 55, up slightly month-on-month.
“The UK’s services purchasing managers index already staged a fairly sharp fall in December on the arrival of Omicron. And since then, other data suggests the economic impact probably hasn’t been huge, and may have begun to improve in January,” said economist at ING.
“Worker illness will have held back production for many industries, particularly consumer services where other surveys have shown absence rates to be highest. But consumer spending, at least at social venues, appears to have begun to rebound now that individuals are less cautious about self-isolating (which was the case ahead of Christmas).”
TUESDAY 25 JAN
Can Microsoft reboot big tech hopes?
Following on from Netflix’s weak numbers last week, Microsoft Corporation (NASDAQ:MSFT) continues the big tech earnings circus on Tuesday, which should be of interest to the many UK private investors who have started to get into UK investing in the past few years.
With the market already taking the foot off the tech pedal as monetary policy tightening begins, and Netflix’s disappointing earnings given the bazooka treatment by investors, there are some potentially fragile hopes riding on this US earnings season.
READ: Attention turns to other FAANG companies as Netflix shares plummet
“The hope going into earnings season was that companies were going to settle the nerves,” said market analyst Craig Erlam at Oanda. “That we were about to get a reminder of the strength of the economy and the resilience we’ve seen over the last couple of years. Instead, the results have been rather…
Read More: Lots riding on earnings as Tesla Inc, Apple Inc, Microsoft Corp in US