Amid the economic gloom and ongoing conflict in Ukraine, there are signs of a return to normalcy.
The Golden Globes awards ceremony returns to its Los Angeles home this week, after boycotts for lack of diversity led to the event’s cancellation last year. Looking further ahead, world leaders, business leaders and economic thinkers will start arriving in the Swiss resort town of Davos this Sunday for the following week’s World Economic Forum.
The next seven days also see the official launch of the fourth quarter earnings season kick off, starting with Wall Street banks and UK retailers. This will of course remind us that we are far from back to normal for the global economy – more details below.
For the UK, normalcy currently means widespread industrial action. Paramedics and driving instructors are staging new outings this week as strike ballots wrap up for teachers’ unions in England and Wales.
Normalcy has been restored at least to the US Congress with the vote to install Kevin McCarthy as Speaker of the House of Representatives. Attention can now focus on the economic challenges this year will bring – more on the data announcements coming this week below.
Could things get better? Yes, if you are in Cornwall. Monday promises to be a historic day for the British county – at least according to Virgin Orbit – with the launch of the first space satellite from mainland Britain.
It could perhaps best be described as a bit of classic British eccentricity since the nine satellites will be launched into orbit using a rocket launched from a repurposed Boeing 747, which is due to take off from the airport of Newquay Monday evening. It certainly shows a degree of creativity and should at least lift the spirits of the Brits.
Who likes interest rate hikes? Banks, who are they? That will be clarified this week when several of Wall Street’s biggest lenders release fourth-quarter numbers on Friday.
These companies made money from the Fed’s tightening by raising lending rates more than deposits. Analysts estimate JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are expected to report collective net interest income for the last three months of 2022 of nearly $60 billion, up 30% year-on-year, according to data. consensus data compiled by Bloomberg. The worry is that this lucrative party may not last and net interest margins have peaked.
The flip side of the rate hikes is the problem of high inflation, which brings me to the other theme on the business calendar this week, retailers. Rising starting prices may seem like a good thing for retailers. Not when inflation hits double digits, it doesn’t.
We’ll find out exactly how bad things have gotten over the Christmas period – or even if storage for World Cup viewing has provided any sort of boost – thanks to a slew of business updates. from UK high street and online brands this week.
Consumer spending could of course be better than expected, as Next showed last week. Games Workshop, which released first-half numbers on Tuesday, is getting a lot of excitement (and not just among Dungeons & Dragons-obsessed teens) about growth opportunities due to a spike in role-playing games during the pandemic. The expectations of investors (as well as teenagers) have been further heightened during the fantasy game producer’s recent deal with Amazon TV and Film.
Expect a slew of consumer price indexes and other inflation data over the next few days from the United States, China, Japan, Australia, Brazil and Mexico.
The British Retail Consortium updates its monthly UK high street sales survey on Tuesday, while on Friday the Office for National Statistics releases the latest monthly estimate of gross domestic product giving an idea of where the country stands in terms of recession.
Monetary policy comes this week from the Bank of Korea, which is expected to raise the base rate another 25 basis points to 3.50% on Friday.