The State of Markets
A brief review of all key upcoming events across the major regions of the globe & an overview of key recent market trends.
The State of Markets:
After consolidating their gains for a number of weeks, US equity markets broke out above of their sideways trading ranges Friday. With that, the S&P500 (+1.3%), Nasdaq100 (+2.0%), and Philly SOX (+4.0%) all closed at new record highs.
That move higher was despite ongoing strength in US Treasury yields (& the re-pricing of US rate expectations). Indeed, in just the past week, the US rates market has priced out 36bps of Fed cuts for 2024 (i.e. having priced 158bps of cuts a week ago, to 122bps as of Fridayy’s close).
Elsewhere, other key risk asset prices have also traded in a range in recent weeks. The oil price, for example, since rallying from a key level last month, has formed a pennant pattern. That is, it’s traded in a narrowing range – with lower highs and higher lows in December and January (see key chart below). The key question, therefore, is: Which way will oil break out?
Several key events this week bear watching closely in that respect. They include, most notably, policy decisions from the PBoC, BoJ, Bank of Canada, and the ECB. There are also several key US macro data releases, including the Conference Board’s LEI, the first estimate for Q4 GDP, as well as personal income and spending. Major companies are also reporting earnings this week (including Microsoft, Netflix, Tesla, IBM, and others). Please see below for a full list of key events.
(All in London time BST)
Events: China policy rate decision (1:15am).
Data: US Conference Board leading index (Dec, 3pm).
Earnings: N/A
Events: ECB Bank lending survey (9am).
Data: UK public sector finances (Dec, 7am); EZ Europe Commission consumer confidence (January first estimate, 3pm).
Earnings: Microsoft, J&J, Netflix, Verizon.
Events: N/A
Data: HCOB manufacturing & service sector PMIs for France (8:15am), Germany (8:30am), EZ (9am) – all December first estimates; S&P Global manufacturing & service sector PMIs for UK (9:30am) & US (2:45pm) – both January first estimates.
Earnings: Tesla, IBM, AT&T.
Events: ECB policy rate decision (1:15pm) followed by Lagarde press conference (1:45pm).
Data: German IFO business expectations (Jan, 9am); US GDP (Q4 first estimate, 1:30pm); US durable goods orders (December first estimate, 1:30pm).
Earnings: Visa, Intel, Louis Vuitton, Christian Dior.
Events: N/A
Data: UK GfK consumer confidence (Jan, 12:01am); EZ M3 money supply (Dec, 9am); US headline & core PCE inflation (Dec, 1:30pm).
Earnings: Caterpillar.
The SHORT VIEW (& market positioning), 17th January 2024:
“OIL: Breakout Ahead”
Since the late October lows, US and global equity markets have moved sharply higher, performing strongly in November and December. The S&P500, for example, having troughed on 27th October (at 4,103) has subsequently rallied 17%. The NASDAQ100, after its July to October ‘summer swoon’, reached a local low on 26th October and has since rallied around 20% (up to its end 2023 highs). Other global equity markets have behaved similarly.
That strength in equities, in such a short period of time, raises questions about where to next?
Events: N/A
Data: US Conference Board leading index (Dec, 3pm).
Earnings: N/A
Events: N/A
Data: US Philadelphia Fed non-manufacturing activity (Jan, 1:30pm); US Richmond Fed manufacturing & business conditions (Jan, 3pm).
Earnings: Microsoft, J&J, Procter&Gamble, Netflix, Verizon, Texas Instruments, General Electric, Intuitive Surgical, RTX Corp, Lockheed Martin, Canadian National Railway Co, 3M, DR Horton, PACCAR, Archer-Daniels-Midland, Halliburton, Invesco, United Airlines
Events: Bank of Canada policy rate decision (2:45pm).
Data: US Weekly MBA mortgage applications (12pm); US S&P Global manufacturing & service sector PMIs (January first estimates, 2:45pm).
Earnings: Tesla, Abbott Labs, ServiceNow, IBM, AT&T, Elevance Health, Lam Research, Progressive, General Dynamics, CSX, Amphenol, Freeport-McMoran, Crown Castle, Kimberly-Clark, Ameriprise Financial, Seagate.
Events: N/A
Data: Canadian CFIB business barometer (Jan, 12pm); Canadian SEPH payroll employment change (Nov, 1:30pm); US Chicago Fed Nat activity (Dec, 1:30pm); US GDP (Q4 first estimate, 1:30pm); US retail & wholesale inventories (December first estimate, 1:30pm); US durable goods orders (December first estimate, 1:30pm); US weekly jobless claims (1:30pm); US new home sales (Dec, 3pm); US Kansas Fed manufacturing activity (Jan, 4pm).
Earnings: Visa, Intel, T-Mobile, Comcast, Union Pacific, Blackstone, NextEra Energy, Starbucks, Marsh McLennan, KLA Corp, Sherwin Williams, Northrop Grumman, Arthur J Gallagher, Humana, Capital One Financial, Valero Energy, Dow, Rockwell Automation, American Airlines, Union Pacific Bancorp, Southwest Airlines
Events: N/A
Data: US personal income & spending (Dec, 1:30pm); US headline & core PCE inflation (Dec, 1:30pm); US pending home sales (Dec, 3pm); US Kansas Fed services activity (Jan, 4pm).
Earnings: Caterpillar, AmEx, Colgate-Palmolive, Norfolk Southern, First Citizens BancShares.
Events: N/A
Data: N/A
Earnings: N/A
Events: ECB Bank lending survey (9am).
Data: EZ Europe Commission consumer confidence (January first estimate, 3pm).
Earnings: Ericsson, Logitech
Events: N/A
Data: EZ Europe Commission consumer confidence (January first estimate, 3pm).
Earnings: ASML, Epiroc, Swedbank
Events: ECB policy rate decision.
Data: French INSEE business & manufacturing confidence (Jan, 7:45am); German IFO business expectations (Jan, 9am); French total jobseekers (Q4, 11am).
Earnings: Louis Vuitton, Christian Dior, Atlas Copco, STMicroelectronics, Sandvik, Nokia, SEB, Givaudan.
Events: ECB survey of Professional Forecasters (9am); speeches by the ECB’s Panetta in Latvia (7:30am) followed by Kazaks & Vujcic in Latvia (9:30am).
Data: German GfK consumer confidence (Feb, 7am); French INSEE consumer confidence (Jan, 7:45am); EZ M3 money supply (Dec, 9am).
Earnings: Volvo, Lonza
Events: N/A
Data: N/A
Earnings: N/A
Events: N/A
Data: Public sector finances (Dec, 7am).
Earnings: Associated British Foods
Events: N/A
Data: S&P Global manufacturing & service sector PMIs (January first estimate, 9:30am); CBI industrial trends survey (Jan, 11am).
Earnings:Hargreaves Lansdown
Events: N/A
Data: CBI distributive trade survey (Jan, 11am).
Earnings: N/A
Events: N/A
Data: GfK consumer confidence (Jan, 12:01am).
Earnings: N/A
Events: China MLF rate decision (1:15am)
Data: South Korean imports & exports (Jan, 12am); Taiwanese exports (Dec, 8am).
Earnings: N/A
Events: N/A
Data: Australian NAB business confidence (Dec, 12:30am); Australian Judo Bank manufacturing & service sector PMI (January first estimate, 10pm); Australian Westpac leading index (Dec, 11:30pm); Japanese exports & imports (Dec, 11:50pm).
Earnings: Axis Bank
Events: N/A
Data: Japanese Jibun Bank manufacturing & service sector PMI (January first estimate, 12:30am); South Korean GDP (Q4 first estimate, 11pm).
Earnings: Samsung Biologics, Kia, SAP, Disco Corp, Nidec
Events: BOJ minutes of December meeting (11:50pm)
Data: Japanese machine tool orders (December final estimate, 6am); Japanese PPI (Dec, 11:50pm).
Earnings: SK Hynix Hyundai, LG, POSCO, Tata Steel.
Events: Market holiday in Australia on account of Australian Day.
Data: Japanese ESRI leading index (November final estimate, 5am).
Earnings: Bank Rakyat, Fanuc, LG Energy
Last week:
Longview on Friday, 19th January 2024:
“Equity Market: Where Next? PLUS Q2 Challenges/Risks”
Quant Monthly Appendix 1 & 2, 18th January 2024:
“Country & Sector Valuation”
The SHORT VIEW (& market positioning), 17th January 2024:
“OIL: Breakout Ahead”
Commodity Fundamentals Report No. 174, 16th January 2024:
“Copper Prices: Downtrend to Continue (For Now)”
(Longview on Friday, 12th January 2024:
“Bonds – BUY or SELL? What Happened to Productivity Growth? What Does it Mean for Bonds? Will it Come Back?”
Monthly Global Asset Allocation No. 29, 12th January 2024:
“UK: Cheap & Under-Owned a.k.a. Stay OW in Strategic Portfolios”
The SHORT VIEW (& market positioning), 10th January 2024:
“Has Gold Lost its Shine?”
Monthly Global Asset Allocation No. 28, 8th January 2024:
“UK – Nearing a Trough a.k.a. Household Cashflow to Reaccelerate”