1) Davos World Economic forum – 21/01 – having seen equity markets get off to a fairly positive start to the year, the time has come for investors to cast eye towards the icy slopes of Davos, where the so called great and good get together, at significant expense to discuss the challenges facing the global economy. Over the last ten years it is questionable as to what if anything these annual gatherings have achieved, apart from a significant boost to the Swiss economy. Twelve months ago, the gathering was notable for who wasn’t there, just as much as for who was. There will certainly be a lot of media coverage with plenty of pledges from business leaders and politicians to come up with measures to help boost the global economy and trade, as well as deal with the challenges of climate change, a la Greta Thunberg. The reality is that for all the heat and light, to paraphrase William Shakespeare, it will probably be much ado about nothing.
2) UK Wages/Unemployment – 21/01 – we’ve heard whispers in recent weeks that Bank of England officials appear to be leaning towards the prospect of another cut in interest rates over concerns about the slowdown in the UK economy in the past three months. The slowdown is certainly a cause for concern; however, wage growth has continued to be resilient at over 3%, and unemployment is still close to 40-year lows. Consumers do appear to have cut back as evidenced by a slowdown in retail sales in November and December, but that is by no means a bad thing given that consumer credit is quite high. Inflation is also subdued, just under the Bank of England’s 2% target at 1.3%. Given that the Bank of England’s mandate is to target inflation, it is not immediately clear what effect a 25bp rate cut might have, given it is already priced in.
3) Bank of Japan rate decision – 21/01 – no changes are expected here from the Bank of Japan, with Bank of Japan governor recently saying that the central bank remained ready to act further, against a backdrop of rising geopolitical tension. At the end of last year, he, as well as Japanese PM Abe urged Japanese business leaders to look at increasing wages to help boost the economy, and consumer spending power. He said that doing this would help the central bank meet its inflation target, something it has failed to do in the last thirty years.
4) Bank of Canada rate decision – 22/01 – at the end of last year, weak economic data had raised concerns that the Bank of Canada might well look at cutting rates in the first quarter of this year. This now looks in doubt given recent strong jobs data, after December payrolls followed on from a fairly strong November report. As long as the US economy continues to perform well, the economy in Canada is also likely to feel the benefits.
5) ECB rate decision – 23/01 – in a big week for central banks the European Central Bank will also be meeting for the first time in 2020 against a backdrop of an improvement in recent manufacturing and services PMI numbers at the end of the last quarter. Officials are expected to paint a cautious outlook for the European economy, while being cognisant of the fact that the recovery is still at its very early stages and is quite weak. The outlook is expected to outline that risks still remain tilted to the downside, while President Lagarde is also likely to sketch out in more detail the scope of the strategic review that she is looking to undertake into the central banks overall remit.
6) Manufacturing and services flash PMI’s (Jan) 24/01 – recent improvements in PMI data towards the end of last year, has raised hopes that the economy in Europe could be about to embark on an economic upswing. Recent data has shown that, while manufacturing is still in recession, there is a tepid recovery under way. Services tells us a different story, still holding up against a weak manufacturing backdrop. Policymakers will be hoping that this divergence continues to hold up, as consumers continue to take up the slack at a time when the global economy is struggling to pick up.
7) Easyjet Q1 - 21/01 – since the lows of last summer, Easyjet’s share price has risen more than 76%, helped by improvements in passenger numbers, as well as higher revenues and profits. Part of these gains have no doubt been down to the problems facing its peers where strikes at British Airways and Ryanair helped boost its numbers. It will also have reaped the benefits of the collapse of Thomas Cook having already paid £36m for the collapsed holiday company’s slots at Gatwick and Bristol. Earlier this month Ryanair upgraded its own numbers, having struggled for most of the year due to industrial unrest. The company still plans to go down the package holiday route, despite the collapse of Thomas Cook, and have increased staff numbers in package holiday division from 30 to 40, in the wake of Cook’s demise, with the company looking to launch the business in either February or March.
8) Burberry Group (LON:BRBY) Q3 20 – 22/01 – when Burberry reported in November there was some concern that the unrest in Hong Kong might adversely affect its revenue and profit numbers. The region was certainly a drag on the company, with a £14m impairment charge in the numbers, however management kept full year guidance unchanged as well as announcing a 14% increase in operating profit to £203m for the six months to the end of September. Revenues also rose to £1.3bn and management appear optimistic that the recent partnership with Tencent will help deliver tangible returns in 2020.
9) Netflix (NASDAQ:NFLX) Q4 19– 21/01 – the launch of Disney+ and Apple (NASDAQ:AAPL) TV+ in the last quarter could well have impacted Netflix subscriber growth over the Thanksgiving and Christmas period. As the global number one streaming service Netflix is acutely vulnerable to the much deeper pockets of two of the world’s biggest brands. As things stand Netflix is already spending more on content in an attempt to maintain its market position, however to make that sustainable it also needs to add new subscribers at a much faster rate than its deeper pocketed peers. In October Netflix raised another $2bn in debt to fund new content with the company set to spend $18bn over the next 12 months. In its last quarter the company added 6.8m subscribers, falling slightly short of its 7m target and said it expected to add 7.6m in Q4, putting it well above 160m global subscribers. Management will be hoping that the addition of a host of new content coming on line including the second series of Lost in Space, and the recent success of Martin Scorsese’s “The Irishman” will have helped boost its numbers. Expectations are for profits of $0.52c a share.
10) Intel (NASDAQ:INTC) Q4 19 – 23/01 – in its last set of numbers chipmaker Intel saw profits and revenues both beat expectations, sending the shares sharply higher, and further away from their summer lows, amidst concerns that the US, China trade spat as well as slowing global demand was impacting its bottom line. Increased demand for laptops, and desktop PC’s saw revenues hit $9.71bn in Q3. Across all of its divisions, demand for chipsets helped revenues beat across the board, and with the increasing growth of cloud services from Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) helped that division return to growth. Intel raised its full year guidance at the end of last year to $4.60c a share on $71bn of revenue and is already up over 30% from last summer’s lows.
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