Yazar: Noreen Burke
Investing.com – With reports from Apple, Microsoft, Facebook and Tesla, investor attention will be on major US companies. The Fed will meet and the markets will receive the first data on the performance of the US economy in the last quarter of 2020. The IMF will update its forecast for the global economy, and a group of world leaders and central bank executives, including Christine Lagarde, will speak at the World Economic Forum’s online Davos conference.
Here’s what you need to know when entering the new week:
1. Earnings period gains momentum
In an environment of return to value stocks, backed by the hopes of the economic recovery promised by vaccines, technology stocks, which were in the driver’s seat for most of 2020, took the back seat at the end of last year.
This transition has stalled in recent days, with the lackluster reports of major banks and the bombshell quarter report of Netflix (NASDAQ :), whose stock rose 17%.
Microsoft (NASDAQ 🙂 on Tuesday and Apple (NASDAQ 🙂 a day later will report on Facebook (NASDAQ 🙂 and Tesla (NASDAQ :), which is on its index.
The results could raise the total market value of FAANG shares (Facebook, Amazon (NASDAQ :), Apple, Netflix and Google’s parent company Alphabet (NASDAQ :)), again to over $ 6.16 trillion, the all-time high.
Expectations are rising – Morgan Stanley raised the Apple price target by declaring themselves “buyers ahead of a record December report forecast”.
Fed meeting 2
Fed politicians will make it the first since last week that Democrats took control of the Senate. Democrats’ control increases the likelihood that the $ 1.9 trillion stimulus package proposed by new President Joe Biden will be accepted.
While the Fed is not expected to make a political change as a result of the two-day meeting to end on Wednesday, it can be emphasized that the economy is well below the full employment and 2% inflation targets.
There is speculation that increased government spending to support recovery could spur the Fed to start tapering its major bond purchase program as soon as the end of this year.
But Fed Chairman Jerome Powell said in a statement earlier this month that “it’s not time to talk out.”
3.US GDP data
Market participants will obtain GDP figures on Thursday to see how the US economy has performed in the last quarter. In December, consumer spending figures were weak and employment declined.
After a record 33.4% annual growth in the third quarter, economists expect growth in the last quarter of the year. The economy is thought to have contracted 3.5% on a yearly basis.
The economic calendar also includes figures for Wednesday, Thursday and Friday and data.
4th Virtual World Economic Forum
Chinese President Xi Jinping, German Chancellor Angela Merkel, Japanese Chancellor Yoshihide Suga and European Central Bank (ECB) President Christine Lagarde are among the big names who will speak at the World Economic Forum, which will be held virtually this year instead of meeting in Davos as usual.
There is no shortage of issues due to the deepening of the global economic crisis: rising unemployment and debt levels, rising income inequality and climate change.
In other news, the IMF will update its global economic growth forecast on Tuesday. In October, he predicted a 4.4% contraction in global GDP for 2020 and a growth of 5.2% in 2021.
GDP data for the euro area and for the fourth quarter may show a contraction in their economies in 2020.
Germany, the largest economy in the euro area, will be released on Friday. With unprecedented rescue and incentive measures helping to reduce the shock of the epidemic, it can be seen that the economy contracted less than feared, at 5.0% in 2020.
If economies perform better than expected, this could serve as a buffer for the next hit in this quarter.
– This news has the contribution of Reuters.