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It's
been a turbulent start of the year for world markets with the
prospect of interest rate hikes in the U.S. starting to skim the
froth off global equity valuations and leaving investors
wondering for how long the bull run would continue.
Talk about the Federal Reserve turning off the tap on massive
stimulus is here to stay but with the earnings season kicking
off on Wall Street risk sentiment could find some comfort as
corporates report double digit profit increases.
And for the coming week investors will be also spared hawkish
speeches from Fed officials now in blackout mode before a policy
meeting on Jan 26.
S&P 500 earnings are expected to have grown 23.1% in the last
three months of 2021 and STOXX 600 earnings are seen up 48.5%.
Yet the bar is high and management teams might find it harder to
please markets accustomed to stellar corporate growth.
Shares in most big Wall Street banks fell on disappointing
numbers last week, leading to two consecutive weekly losses for
the U.S.'s main equity benchmark. Today it will be quieter as
Wall Street is closed for Martin Luther King Day.
Meantime, European index futures pointed to slight gains at the
open. In Asia, China's central bank unexpectedly cut the
borrowing costs of its medium-term loans for the first time
since April 2020 to cushion an economic slowdown. And Chinese
stocks advanced.
Finally, Credit Suisse Chairman Antonio Horta-Osorio has quit
following an internal probe into his personal conduct, raising
questions over the embattled lender's new strategy. Its shares
rose 2% ahead of the cash market open.
Key developments that should provide more direction to markets
on Monday:
* China's economy rebounded in 2021 from itspandemic-induced
slump but the pace slowed further in Q4 off theback of weak
consumption and a property downturn * GlaxoSmithKline rejected a
50-billion-pound offer fromUnilever for its consumer goods arm,
saying it undervalued thebusiness * ECB speaker: President
Christine Lagarde * Davos WEF starts * EU finance ministers meet
* German foreign min Baerbock visits Ukraine * UK Rightmove
House prices Jan
(Reporting by Danilo Masoni; Editing by Saikat Chatterjee)
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