Top 5 things to watch in markets in the week ahead


markets, Fed, earnings, jobs, coronavirus, ECB, GDP, China
Top 5 things to watch in markets in the week ahead

The week ahead is packed with events that could move the markets, from the Federal Reserve’s first meeting of the year to the latest U.S. jobs report. In this article, we will highlight the top 5 things to watch in markets in the week ahead and how they could affect your investments.

1. Fed decision and Powell press conference

The Federal Reserve will announce its monetary policy decision on Wednesday, followed by a press conference by Chair Jerome Powell. The Fed is widely expected to keep its interest rate and asset purchase program unchanged, as it continues to support the economic recovery from the pandemic. However, investors will be looking for any hints on the Fed’s outlook for inflation, growth, and tapering, as well as its views on the recent market volatility and fiscal stimulus.

The Fed’s tone and guidance could have a significant impact on the markets, especially on the bond yields, the dollar, and the stock valuations. A dovish Fed could boost the risk appetite and lift the stocks, while a hawkish Fed could trigger a sell-off and a flight to safety.

2. Big tech earnings

The earnings season will continue with some of the biggest names in the tech sector reporting their quarterly results. Among them are Apple, Microsoft, Facebook, Tesla, Amazon, and Alphabet, which together account for more than 20% of the S&P 500 index. These tech giants have been the main drivers of the market rally in the past year, as they benefited from the increased demand for online services, cloud computing, and digital devices amid the pandemic.

However, they also face some challenges, such as regulatory scrutiny, antitrust lawsuits, rising costs, and competition. Investors will be looking for any signs of slowing growth, margin pressure, or guidance cuts, as well as any positive surprises, new product launches, or strategic moves. The tech earnings could set the tone for the overall market sentiment and performance, as well as the sector rotation and valuation trends.

3. U.S. jobs report

The U.S. labor market will be in focus on Friday, when the Bureau of Labor Statistics will release the nonfarm payrolls report for January. The report will provide the latest snapshot of the employment situation in the U.S., which is a key indicator of the economic health and recovery. The report will also influence the expectations and actions of the Fed and the government regarding the monetary and fiscal policies.

The consensus forecast is for the U.S. economy to add 50,000 jobs in January, after losing 140,000 jobs in December, which was the first decline since April. The unemployment rate is expected to remain unchanged at 6.7%, while the average hourly earnings are expected to rise by 0.3% month-over-month and 5.1% year-over-year. However, the report could surprise in either direction, depending on the impact of the coronavirus surge, the vaccine rollout, and the stimulus measures on the labor market.

A strong jobs report could boost the market confidence and optimism, while a weak jobs report could raise the concerns and uncertainty. A mixed jobs report could have a mixed effect on the markets, depending on the interpretation and reaction of the investors.

4. Coronavirus developments

The coronavirus pandemic will remain a major factor that affects the markets, as the global cases and deaths continue to rise and new variants emerge. The markets will be closely monitoring the developments and trends of the virus spread, the lockdown measures, the vaccine distribution, and the testing and tracing efforts, as they have implications for the economic activity, consumer behavior, and corporate earnings.

The markets will also be paying attention to the news and updates on the vaccine efficacy, safety, and availability, as well as the potential challenges and risks, such as supply shortages, distribution bottlenecks, logistical issues, or adverse reactions. The markets will be looking for any signs of progress or setbacks in the fight against the virus, as they could affect the market mood and outlook.

5. Global events and data

Besides the U.S. events and data, there are also some important events and data from other parts of the world that could influence the markets. Some of them are:

  • The European Central Bank will announce its monetary policy decision on Thursday, followed by a press conference by President Christine Lagarde. The ECB is expected to keep its policy stance unchanged, after expanding its stimulus program in December. However, the markets will be looking for any clues on the ECB’s assessment of the economic outlook, inflation, and exchange rate, as well as its readiness to act if needed.
  • The U.K. will publish its fourth-quarter GDP report on Friday, which will show the impact of the Brexit uncertainty and the coronavirus restrictions on the British economy. The consensus forecast is for the U.K. economy to contract by 8% year-over-year and 1.4% quarter-over-quarter, after growing by 16% in the third quarter. The report could affect the market sentiment and the pound sterling, as well as the expectations and actions of the Bank of England, which will hold its next meeting on February 4.
  • China will release its official and Caixin manufacturing and services PMIs for January on Sunday and Monday, respectively. These surveys will provide the latest insights into the activity and sentiment of the Chinese factories and firms, which are the main drivers of the Chinese and global growth. The markets will be looking for any signs of strength or weakness in the Chinese economy, as well as the impact of the coronavirus resurgence and the Lunar New Year holiday on the production and consumption.

These are the top 5 things to watch in markets in the week ahead, but there are many more factors that could influence the market sentiment and performance. To stay updated on the latest market news and analysis, subscribe to our newsletter and follow us on social media.


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  • UK GDP: what to expect from the Q4 figures
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