Investors Prepare For A Week Of Potentially Big News Developments

This morning feels like the calm before the upcoming storm for equity markets. US index futures are pretty much flat trading between -0.1% and +0.2% coming off a day of mixed performance last Friday. European bourses are trading flat to slightly lower with the FTSE up 0.1% and the Dax down 0.5%.    

Troubled Chinese property developer Evergrande was finally ordered to be liquidated over the weekend. Chinese indices were split on this news with Hong Kong climbing 0.8% and Shanghai falling 0.9%. Commodities appear to have been relatively unaffected with Copper flat and US Crude Oil down 0.2%. Precious metals are climbing with Gold up 0.5% and Silver up 1.2%. The biggest move in commodities this morning has been a 6.9% drop in the price of Natural Gas which may be attributed to an easing of the deep freeze which had gripped much of North America earlier this month moderating.

We are now moving into the peak week of this earnings season with results on the way from top names across multiple sectors including Big Tech, Big Pharma and Big Oil. Five of the “Magnificent Seven” stocks report this week, Microsoft* and Alphabet tomorrow, followed by Apple, and Meta Platforms* after the close on Thursday. Other notable US big caps include AMD, UPS, GM and Starbucks tomorrow, Boeing and Mastercard on Wednesday, Merck and Honeywell on Thursday and then Exxon Mobil and Chevron on Friday.

The Fed releases its latest interest rate decision and statement on Wednesday. The US central bank is not expected to do anything so investors may focus their attention more on the statement and press conference for hints on when the Fed may start cutting rates, especially amid rampant speculation around the that the first cut could come as soon as the next meeting in March, which would be significantly sooner than the previous FOMC dot plot forecasts have implied. Since the start of the year, Fed officials have been trying to walk back the dovish tone Fed Chair Powell set at his December press conference with some success, but investors may look to Powell for more clarity on the matter.

It’s also the end of the month this week, bringing a flurry of economic data releases that start with ADP Payrolls on Wednesday, Manufacturing PMI on Thursday and wrapping with US Nonfarm Payrolls and wage inflation on Friday.

 For Canada, earnings season gets underway this week headlined by CP Rail and Metro on Tuesday, Rogers and Canada Goose on Thursday, and Imperial Oil on Friday. Monthly GDP for November comes out on Wednesday, job numbers don’t come out until later next week.

*Shares of Microsoft and Meta Platforms are held in portfolios managed by SIA Wealth Management.

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