Global markets this week showed mixed trends
📈 US stock indices continue to strengthen amid the stability of the most significant issuers, such as Apple, Tesla, Microsoft, the general background of financial reports is positive.
📉 While the less popular blue chips on Thursday, against the backdrop of minimal correctional fluctuations, the SP500 reacted horribly. A positive background does not save some individual stocks from a deep correction.
Although the Russian market is getting more expensive, its growth is noticeably slowing down for some major companies. Thus, Gazprom and Sberbank are already showing signs of a maturing correctional wave.
Oil is trading in a steady downtrend after a collapse at the beginning of the month. The reduction in stocks and negative news from Libya, surprisingly failed to support oil quotes. Natural gas conquers the lows.
The European market is performing a downward correction.
But there were no significant political and economic shocks this week. Nothing fundamentally new has happened. Trends formed earlier did not change their global vector.
In the upcoming trading week, the following macroeconomic events will be in the focus of investors' attention:
🇩🇪 German Consumer Climate Index, which measures consumer confidence based on 2000 national companies interviewed. The indicators will be worse a little, but the general dynamics of the markets are unlikely to be affected, with the exception of some pressure on German stock markets.
Germany Business Expectations Index. This indicator is part of the business climate index. The indicators show an upward trend, relative to the 4th quarter of 2019, but the general trend is still downward.
The German IFO business climate index, which measures business sentiment and business conditions in Germany, is gradually trying to recover to around 100, which indicates a general positive attitude of German business to the economic situation. While it is still far from the cherished mark, but the country's economy is trying to correct this situation. Still unsuccessful. The expected value of the index is not more than 97.00.
Data on unemployment and changes in the number of unemployed in Germany. We expect a slight decrease in the unemployed, which will not affect the overall picture in the framework of December 2019 - January 2020. The unemployment rate will remain approximately 5.0%. As for the overall increase in the number of unemployed, it should be noted that topics are slowing down. This is more likely due to the fact that at the end of the year, companies are more occupied with closing the year for various indicators than with staffing.
🇫🇷 Data on unemployment in France. No special changes will follow, but we will see a slight increase in the number of employed citizens. This phenomenon is traditional for the beginning of the year for almost every normal world economy.
🇺🇸 US New Home Sales Report. According to the forecasts of world analysts - in January 2020 there is an increase in sales within 10-15 thousand objects compared to December. For the economy as a whole, this is a positive signal, but it should be considered that expensive purchases before the New Year are not so popular among the population.
Basic US durable goods orders. The mixed dynamics of the indicator at the turn of several years makes it difficult to predict the value for sure. However, after the New Year holidays, it is more likely that the indicator will leave the zero zone and at least a 0.1% increase is provided.
Consumer Confidence Index has been in a steady uptrend since 2017. Despite a slight increase in 2019, with a tremendous increase in the welfare of US companies, in 2020 economic activity is more than required to compensate for the above nuance. Strengthened performance expected.
Real Estate Incomplete Sales Data (PHSI). Data for December 2019 It is possible that the indicator will increase due to the fact that expensive purchases, as a rule, are mostly people not at the end of the year.
FED interest rate decision, followed by a FOMC statement and a large traditional press conference by the FED directorate. A reduction in the % rate in the current conditions is unlikely due to the fact that the Fed's efforts on QE (which they call differently, but all the facts say otherwise) are quite enough to create increased liquidity in the stock markets and keep the main indexes at historic highs. They will leave a trump card with a decrease in the interest rate in reserve. You should not expect changes at the current meeting, however, the rhetoric of the FOMC members may contain clues regarding the further monetary policy of the US Central Bank.
Publication of US GDP data for the 4th quarter of 2019. We expect indicators at 2.1%, which is generally quite good and will support the US dollar quotes at the moment.
OPEC countries will report on the level of oil production. We expect a slight increase in production, which, apparently, caused a decrease in oil prices. A further drop in WTI on the back of statements is not ruled out, however, OPEC will most likely not let the price fall below 52.00.
🇷🇺 In Russia, information is published on the level of unemployment, which has been steadily declining since 2017, having a positive impact on the domestic stock markets. Indicators are expected in the level of 4.5-4.7%.
Along with the unemployment rate, data on retail sales will be published. Despite popular opinions among the population, statistics speak for themselves. Volumes are increasing.
🇦🇺 Australia will report on the inflation rate for 4Q 2019. A slight increase in the indicator within 0.1-0.15% is acceptable and most likely in the current economic and natural situation of the country.
🇬🇧 Housing price indices in the UK in annual and monthly comparison. On an annualized basis, the tendency for the change in the value of real estate, both residential and commercial, has gone out of the declining range and is aimed at medium-term growth. After Brexit, the growth trend will definitely increase. Compared with the past months, cardinal differences are not expected, but it needs to be prepared for a slight increase in price.
A decision on the interest rate of the Bank of England, as well as a report on inflation and the publication of the minutes of the meeting on monetary policy. There is a small probability that the interest rate may be lowered, but so far the probability is relatively low. Nevertheless, the UK stock market has come close to the most important area of resistance and does not allow sellers to beat the price of a downward correction. Investors, apparently, are very optimistic on this issue and regard the rate cut as just a matter of time. There is some truth in this, but at the current meeting we do not expect a decision on easing monetary policy.
🇪🇺 The unemployment rate in the Eurozone as a whole will remain on level of 7.4-7.6%. Compared with the same Russia, this figure is noticeably inferior.
Eurozone inflation. We expect inflation to increase by 0.1-0.15% on an annualized basis, which is within the permissible limits according to the plans of the ECB.
🇯🇵 Japan will report on inflation compared to 2018. The Japanese Central Bank has chosen a subtle and insanely effective strategy in conditions when there is nowhere to lower rates. We don't expect discrepancies with forecasts of world analysts.
Retail sales in Japan are declining compared to the previous year, while production is starting to gain momentum.
🇨🇳 China after long holidays will mark data on business activity indices: consolidated, index of the manufacturing and non-manufacturing sectors. The Chinese economy with these indicators is in full order. Each of the indices promises a value above 50.0, which indicates the economic power of the country.
🇨🇦 Canadian GDP. Not the most unequivocal indicator in forecasting. The growth in monthly comparison is very dynamic from -0.1% to 0.1%. The absence of changes since November 2019 is not excluded.
Canada Commodity Price Index. Against the background of declining oil, it will not be surprising to observe the stagnation of Canada's commodity prices.
The upcoming trading week will be final in January 2020. The first half of the week doesn't promise much volatility and trading will be relatively calm, but already on Friday, general trends can be quietly broken against the background of an increased concentration of the most important events for financial markets. The key event is the reports of OPEC countries.