Falling from their record highs by the end of last week, trading is still largely being dictated by the coronavirus.
US
There is perhaps the sense that the markets are caught between two stages of the coronavirus: the short-term, and ongoing, examination of new cases and death tolls, especially outside China; and the long-term, yet to fully emerge economic impact of the illness.
So far we’ve had revenue warnings from Apple and a host of other companies, alongside reports that the outbreak could cost the airline industry $30 billion. As for Friday’s much-anticipated flash manufacturing PMIs, though mixed - broadly better than forecast in Europe, worse than estimated in the US - they all arrived thick with caveats detailing the issues affecting global supply chains, the kind that could well manifest in March’s readings.
Often the market-reaction to these problems has been mitigated by reports of Chinese stimulus – increasingly it looks like Beijing wants to spend its way out of a potential crisis.
It is hard not to see the patterns that have defined trading throughout February repeating in the month’s final week. There’s been a tendency for investors to try and ignore bad news for as long as possible, building markets up to a variety of different – often all-time – highs, before tumbling on one bad headline too many. And then the process begins again.
In terms of US data, there’s the CB consumer confidence reading on Tuesday; the second look at fourth quarter GDP, alongside the latest durable goods orders, on Thursday; and the core PCE prince index and Chicago PMI figures on Friday.
Interesting the most important numbers of the week don’t arrive until the early hours of Saturday morning, as China posts its own manufacturing and services PMIs.
UK
The UK is almost entirely devoid of interesting data this week, leaving it at the mercy of macro-movements (mainly for the FTSE) and the ongoing slanging match between the UK and EU ahead of March’s trade negations (an issue mainly felt by the pound).
There is, however, a pretty busy corporate calendar. Croda International and Hammerson report on Tuesday, followed by Rio Tinto and Taylor Wimpey on Wednesday. Thursday then sees only of those stupidly overstuffed sessions, including statements from Hikma Pharmaceuticals, Mondi, Persimmon, Provident Financial, Reckitt Benickser, Rentokil Initial, RSA Insurance and WPP.
Eurozone
Like in the UK and US, it is hard to see the Eurozone striking out on its own this week. As for its data, there’s the German Ifo business climate number on Monday, the Spanish inflation reading on Thursday and the French GDP and Eurozone-wide inflation readings on Friday.
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