CPI Report, Earnings, Russia/Ukraine – Top 5 Things to Watch in Markets This Week By Investing.com
By Daniel Shvartsman
Investing.com – February started with a tussle in the markets, or a game of cross leader tracking with musical chairs. Outsized moves by tech giants Alphabet (NASDAQ:) (+7.3%), Facebook/Meta Platforms (NASDAQ:) (-26.4%) and Amazon (NASDAQ:) (+13.5%) dragged the market with it, best illustrated at the end of the week’s yo-yo. A surprisingly strong US jobs report also suggested continued strength in the economy, as oil soared to 7-year highs and cryptocurrencies back on the upswing reminiscent of trade. inflation hedge. The end result was a 1.5% rise for the week, with the Nasdaq up 2.4% and Nasdaq up 1%.
Which sets us up for a week with a CPI report and a slew of earnings reports. Many will also follow the Russian-Ukrainian conflict, with its obvious geopolitical importance as well as its direct effects on the commodities sector.
Here’s what you need to know to start your week:
1. US CPI Report
In January, the United States added , surprising economists and analysts who had expected the disruption of the Omicron variant to have a deeper impact. It’s a reminder of how the United States has decided that COVID-19 isn’t a cause for great concern, and also that the US economy is pretty hot. So inflation.
The and come out Thursday before marketing. Economists expect an increase of 0.5% month-on-month and 7.3% year-on-year, with (excluding food and energy prices) also expected 0.5% month-over-month and 5.9% year-over-year. With rumors that the Fed could not only hike four times this year, but also jump straight to a 50 basis point hike in March, this report will carry real weight.
2. Reading the results part 1 – effects related to the pandemic
One way to read Meta Platforms’ muted earnings guidance and report was as yet another sign that the pandemic-related tailwinds have subsided for tech companies. Amazon’s rebound from its reports was as much about the worst already priced into stocks as the company was hit hard in the third quarter.
We’ll continue to get readings on “Covid Games” and “Reopened Games” this week, with the following companies reporting:
- Simon Real Estate Group (NYSE:) ()
- Pfizer (NYSE:) ()
- Platoon (NASDAQ:) ()
- Lyft (NASDAQ:) ()
- disney (NYSE:) ()
- Uber (NYSE:) ()
- Twitter (NYSE:) ()
- AstraZeneca (NASDAQ:) ()
Cloud Flare (NYSE:) ()
- Expedia (NASDAQ:) ()
Peloton’s report will receive additional attention with news from Amazon in the fitness equipment and subscription company, which is at least a sign that Peloton might be for sale. Uber will also hold an investor day on Thursday morning following its report, which will be watched closely.
3. Profit analysis part 2 – effects of inflation
The other big story to watch throughout this earnings season is the impact of inflation on different businesses. We have companies in the materials sector, consumer goods and food, and health care reports, all of which should add to the picture of how far inflation is going and whether there is signs of a slowdown, whether supply chain related or not.
This batch of companies includes:
- Tyson Foods (NYSE:) ()
- Sysco (NYSE:) (()
- centene (NYSE:) ()
- CVS Health (NYSE:) ()
- ArcelorMittal (NYSE:) ()
- Coca-Cola (NYSE:) ()
- PepsiCo (NASDAQ:) ()
- Cleveland Cliffs (NYSE:) ()
- Enbridge (NYSE:) ()
See also: Our full earnings season calendar
4. Russia/Ukraine developments
Diplomatic efforts and military maneuvers should continue between Russia and Ukraine as well as Western countries. Reuters reports that French President Emmanuel Macron is due to visit Russia for talks with President Vladimir Putin on Monday and Tuesday, while The Washington Post reports that US President Joe Biden is due to meet German Chancellor Olaf Scholz on Monday. This comes after reports from a briefing given by the Biden administration to US congressional officials that Russia has assembled 70% of the force needed to fully invade Ukraine, although the briefing did not claim that this would be Russia’s final decision.
The stakes for Ukraine and then Russia and the broader geopolitical landscape are high, and from a market perspective, the price of – which broke the $90/bar barrier for the first time since 2014 as it continues its recent ascent – and will be the center of attention and susceptible to any resolution or escalation.
5. Cryptocurrencies are on the rise again
Cryptocurrencies were an asset class that enjoyed the turn of the calendar page. After losing almost 20% in January, rose almost 8% in February, and rose almost 12%.
As always, the question is what will be the additional driver of price performance in the sector. The rebound coincided fairly closely with the Nasdaq’s (at least temporary) low since January’s correction, suggesting that crypto performance – and perhaps tech stocks too? – is just a result of risk appetite. With another part of bitcoin’s rationale, at least, being its use as an inflation hedge, the CPI report might have been the next catalyst, more or less.
See also: Our cryptocurrencies section