Will the coronavirus remain the main market story as February begins, or will something else usurp the outbreak at the top of the bill?
UK: FTSE to focus on Coronavirus and the Chinese Economy
Though they’ve tried their best at times to ignore the headlines, there’s no doubt about investors’ main preoccupation at the moment. A jumping death toll, a rapid increase of cases in China, and a rising number of positive tests elsewhere has caused the World Health Organisation to declare a global emergency. That’s not the kind of thing to go away overnight.
From a market-perspective, the real fear is that this will have a serious adverse effect on the Chinese economy, with one government economist warning the country’s GDP could fall under 5% in Q1. And that’s working on the assumption of a mid-February peak for the outbreak.
Considering the panic that greeted China’s growth readings as they fell towards 6%, there’s every reason to feel alarmed. Of course any Chinese downward will have an impact on the global economy, hence something like the commodity-heavy FTSE being driven to a 7-week nadir.
If, and it’s a rather colossal if, investors are willing to look beyond the coronavirus situation this week, then for the UK the brunt of its data comes between Monday and Wednesday, as the latest manufacturing, construction and services PMIs are released.
Given the Bank of England didn’t cut interest rates because of signs that the UK economy was rebounding, there might be a lot of pressure put on these readings by the pound.
For the FTSE – and the rest of the Western indices – China’s manufacturing figures on Monday and trade balance numbers on Friday could also play a part in how it performs.
UK: Stocks to Watch
As for the corporate calendar, BP and Micro Focus International report on Tuesday; Barratt Developments, GlaxoSmithKline and Vodafone on Wednesday; and Compass Group on Thursday.
US: Health of the economy
Beyond the coronavirus issues – which, interestingly enough, the Dow Jones has dealt with far better than its European peers, due to strong earnings from the likes of Apple and Microsoft – a new month means a slew of data for the US.
The manufacturing PMIs arrive on Monday, following by factor orders on Tuesday, services PMIs on Wednesday and the nonfarm jobs report on Friday.
US: Stocks to Watch
And while not the biggest week for earnings, General Motors on Wednesday and Twitter on Thursday are joined by Alphabet on Monday. Analysts are expecting the Google-parent to post a earnings of $12.57 per share, with a 19% jump in Q4 revenue to $46.9 billion.
Eurozone: Economic data
In terms of region-specific news, the Eurozone is facing the latest manufacturing and services PMIs on Monday and Wednesday respectively, alongside some brand new EU forecasts and an appearance from Christine Lagarde on Thursday.
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