US Employment Report, Bank of England Meeting, India Budget

The monthly U.S. employment report will add to the picture of the kind of economy Joe Biden has inherited since taking office as president, as the Bank of England meets interest rates slightly higher than negative territory. India sets its budget for the year and the Super Bowl kicks off in a different advertising context. We also get a first look at gross domestic product in the eurozone and earnings reports from tech titans Amazon and Alphabet, major participants in pharmaceutical vaccines Pfizer and GlaxoSmithKline, as well as Royal Dutch Shell and the low company. -cost Ryanair.

Budget / air show in India

Indian Finance Minister Nirmala Sitharaman unveils the country’s annual budget on Monday.

Things are looking a little better for India after a dramatic year. The number of coronavirus infections appears to have declined significantly and the pace of inflation slowed markedly in December, falling within the central bank’s target for the first time since the start of the coronavirus pandemic in the year last.

New Delhi unveiled a $ 10 billion stimulus package for the pandemic-stricken economy in October, but many economists were unimpressed and warned the government was doing too little to revive growth after the shock of its coronavirus lockdown.

This time around, fiscal policy is expected to play a leading role in generating growth, as the central bank seeks to return to a more normalized monetary policy.

A spending cycle is on the cards as the government attempts to chart a way out of the Covid-induced crisis, with generous allocations expected for the rollout of immunization, welfare schemes and capital spending, the while Ms. Sitharaman seeks to gradually reduce the country’s deficit. .

The country is also hosting Aero India 2021 this week, the first global air show to be held since the Covid epidemic.

The biennial event is usually a big draw for aviation groups and defense contractors, but it is likely to be a very moderate affair, with visitors having to carry Covid test reports, while isolation are being quarantined for anyone with symptoms or fever.

super bowl

The biggest American football game of the year is next Sunday, but the pandemic is taking the Super Bowl shine away from some of the most prominent commercial advertisers.

Top brands like Budweiser and Coca-Cola, which for decades have been running memorable commercials for the National Football League championship game, are pulling out this year.

Super Bowl commercials have become drama on their own, with companies hiring top celebrities such as Brad Pitt and creative agencies devised to make spots fun, touching, or otherwise noteworthy.

But the pandemic has changed the attitudes of some brands about their potential return on investment for an advertisement in the Super Bowl game, which remains the most expensive advertising real estate in American media.

Somewhere else . . .

• Liz Truss, Britain’s trade secretary, is due to meet with Japanese and New Zealand ministers on Monday to ask to join the comprehensive and progressive trans-Pacific partnership agreement, with formal negotiations due to begin this year.

• Allies of Kremlin critic Alexei Navalny are expected to rally to his support as a Moscow court considers jailing him on Tuesday for alleged violation of the suspended sentence.

Income Reports

We have more updates from the tech world this week, where most of the big hitters have weathered the Covid storm well. However, the industry is concerned that the pandemic tech bubble echoes that of the dotcom era.

Alphabet, the parent company of Google, is expected to break through the $ 50 billion sales mark, supported by a rebound in digital ad spend during the holiday season, a period that is also expected to boost Amazon sales as customers poured in. on its website during lockdowns.

However, Amazon’s popularity has likely come at the expense of e-commerce company eBay, where fourth-quarter revenue decline is expected.

Ford Motor, which is undergoing an $ 11 billion global restructuring under the leadership of chief executive Jim Farley, is set to take a big hit in the fourth quarter due to a $ 2.5 billion charge related to its exit from operations of Brazilian manufacture.

The automaker has also canceled its joint venture with Mahindra in India as it deals with the aftermath of the coronavirus pandemic and the global shortage of semiconductor chips.

Staying with chips, Qualcomm is expected to see an increase in first-quarter revenue, fueled in part by Apple’s new 5G iPhones, while investors will also keep an eye on Chinese chipmakers SMIC and ASE.

Sales and updates on vaccines developed by Pfizer and GSK, in partnership with BioNTech and Sanofi respectively, will be the focus of the two pharmaceutical companies’ report, as well as guidance on the outlook.

Ryanair is reporting after cutting its winter flight schedules in response to the new wave of lockdowns and travel restrictions in the UK and Europe. Despite this, he seems well placed to last the crisis and the CEO
Michael O’Leary is looking for opportunities to increase the Irish airline’s dominance over European airspace.

BP and Royal Dutch Shell report after a difficult year that added the pandemic-induced price drop to already existing challenges of reversing historic underperformance while navigating the delicate transition to cleaner fuels.

Shell’s fourth quarter results come just days before CEO Ben van Beurden briefs shareholders on his strategy to navigate the energy transition. The company has already warned of a quarterly loss in its exploration and production division, as well as “significantly” weaker results from its oil trading business – a previous buffer for the group.

Revenues and profits are expected to weaken at UK telecommunications operator BT, which recently rocked its core tech business as part of an effort to expand digital services as it tries to improve returns and focus on new areas of growth after stocks hit 11 years. weak last year.

Key reports

On Monday

Nintendo; Ryanair; Hargreaves lansdown

Tuesday

Amazon; Alphabet; Pfizer; ExxonMobil; BP; Electronic arts; Ferrari; Panasonic; Imperial Oil; Ali Baba

Wednesday

Pay Pal; Siemens; Sony; GSK; Spotify; Santander; Volvo; MetLife; eBay; Yahoo Japan; CNH Industrial; Royal Caribbean Cruises; Qualcomm

Thursday

BT; Ping An Insurance; Royal Dutch Shell; Philip Morris; Break; Unilever; SoftBank; Ford Motor; Interactive Platoon; Pinterest; Prudential Financial; YUM! Brands; Nokia; Motorola; German Bank; News Corp; Carlyle Group; Yamaha; The New York Times; Gilead Sciences; Total

Friday

Sanofi; Estee Lauder; BNP Paribas; Aon; Intesa Sanpaolo; Carlsberg; Suzuki Motor; Honda Motor

Central banks and economic data

The US employment figures for January will be the main release of the week and help analysts identify sectors of the economy showing signs of recovery.

Economists polled by Bloomberg estimate that this week’s nonfarm payrolls will show the United States added just 55,000 jobs in January.

This follows a loss of 140,000 in December – the first monthly drop since the early days of the pandemic in April – due to increased restrictions to curb the spread of the virus.

The number of long-term unemployed, or those who have been unemployed for 27 weeks or more, rose to nearly 4 million in December from 1.1 million in February, before the pandemic. Overall, about 18.3 million Americans are on unemployment assistance and the United States has 9.8 million fewer jobs than in February.

China’s PMIs will provide the latest snapshot of the state of the recovery as the world’s second-largest economy heads towards the Lunar New Year holiday when additional Covid restrictions are in place.

Eurozone fourth-quarter GDP is expected to show that the economy has contracted, bringing with it the prospect of a double-dip recession, although it is tempered somewhat by Germany, Spain and France who resist better than expected.

Investors will also keep a close eye on surveys from the U.S. Institute for Supply Management as global commodity prices and shipping costs rise.

It’s a busy week for central banks, with the Bank of England meeting probably drawing the most attention. Investors will be eager to hear what policymakers think as lockdowns continue to weigh heavily on parts of the economy, as well as the sustainability of negative interest rates as an easing tool.

With the base interest rate at an all-time high of 0.1%, there is very little room for maneuver. Yet, for this rally at least, the market expects the BoE to keep rates on hold.

Investors will keep an eye out for clues of future policy at the meetings in India and Australia, although policy changes are unlikely at this time.

Economic activity continues to improve in both countries thanks to the containment of the virus cases, economists noting that Australia’s approach to suppress the virus has boosted consumer confidence and enabled a faster recovery than many other countries.

Further reading

Key data and events

On Monday

Ghana, tariff decision

China, Manufacturing PMI (January)

Germany, retail sales (year on year, December)

United States, ISM manufacturing index (January)

Tuesday

Australia, tariff decision

Italy, GDP (Q4, flash)

Euro zone, GDP (Q4, flash)

Hong Kong retail sales (Dec)

Wednesday

Thailand; Iceland; Poland, tariff decisions

China, services PMI (January)

France, PMI services (January, final)

Euro zone, HICP inflation (January, flash)

United States, ISM Services Index (January)

Thursday

Bank of England; Czech republic; Egypt, tariff decisions

Europe, retail sales (year on year, December)

The first job applications in the United States

Friday

India, tariff decision

Australia, retail sales (month to month, December)

United States, non-farm payrolls (January)

Canada, unemployment (January)

When central bank meetings last longer than a day, they are listed on the date the meeting ends and the policy is announced