Top 5 Things to Watch in Markets in the Week Ahead
U.S. inflation data
Markets are eagerly awaiting Tuesday’s U.S. inflation figures as they seek clues on the timing of potential interest rate cuts from the Federal Reserve. Following strong jobs and growth data, the focus now shifts to the inflation report for January, with any signs of price pressures rebounding likely to impact rate cut bets.
Economists are expecting a rise in consumer prices from the prior month, with underlying inflation also seen increasing from a year earlier. Additionally, several Fed officials are scheduled to speak during the week, providing further insight into the central bank’s outlook.
Earnings
As earnings season continues, investors are optimistic after the S&P 500 closed above 5,000 for the first time. With upbeat results from megacaps and chip stocks, expectations for fourth-quarter earnings growth have increased to 9.0% from the initial 4.7% on Jan. 1.
Upcoming reports from companies like Shopify, Marriott, Kraft Heinz, Cisco, Wendy’s, and Trade Desk will offer further insight into the market’s performance.
Oil prices
Oil prices are expected to remain volatile following a 6% weekly gain amid concerns over supply from the Middle East and significant U.S. refinery downtime. Market watchers anticipate further price swings in the coming weeks, driven by ongoing conflict in the region and global oil balances.
UK data
The UK is set to release crucial jobs, inflation, and growth data, providing valuable information for investors evaluating the potential timing of the Bank of England’s first rate cut. With moderating employment figures and inflation concerns, the economic outlook remains uncertain.
Wednesday’s data could complicate the monetary policy outlook further, while Thursday’s figures will illustrate the impact of elevated interest rates on the economy.
Japan GDP
Japan is expected to release preliminary GDP data, with a rebound in growth anticipated in the fourth quarter following a contraction in the previous period. The data will be closely watched as markets assess the potential end of the Bank of Japan’s negative interest rate policy, in place since 2016.
Additionally, the GDP data is likely to indicate a shift in Japan’s global economic ranking, further influencing market sentiments.
