The Week Ahead

Good afternoon and welcome to another week in the markets.

Overnight, Asian equities retreated on a broad front as markets reacted to the impressive US NFP reading last week. Hong Kong’s Hang Seng index fell 2.22% in its final hour of trading as property and technology stocks led losses.

The Shenzhen Component shed 1.18% to 11,912.56 and the Shanghai Composite also lost 0.76% to 3,238.7.

In South Korea, the Kospi in South Korea fell 1.7% to 2,438.19 and the Kosdaq lost 0.71% to 761.33. The S&P/ASX 200 fell 0.25% to 7,539.00.

Japan’s Nikkei 225 bucked the trend and gained 0.67% to 2,7693.65

In the UK the FTSE 100 remains close to its new record high, continuing its strong run versus other indices. It has dropped a little this morning in line with the rest of Europe and is currently trading around 7850, having made it over 7900 on Friday.

European shares also fell on the open this morning, with the pan-European STOXX 600 losing about 0.6% and Germany's DAX 40 retreating 0.7%, after stronger-than-expected US jobs data dashed market hopes that the Federal Reserve would pause its monetary policy tightening cycle soon.

Markets now expect US policymakers to hike rates by 25bps in March and May, leaving the peak at 5.0%, compared with a previous forecast of 4.9%. Elsewhere, ECB Governing Council member Ignazio Visco said on Saturday that the ECB could take a cautious approach to increasing interest rates as short-term inflation expectations had dropped sharply. Investors will also focus on results from major companies, including BP, Unilever and banks such as BNP Paribas, Societe Generale and Credit Suisse. On the data front, German factory orders rebounded 3.2% in December, easily beating expectations of a 2% growth.

Oil prices have edged higher after hitting a four-week low on Friday in the wake of the NFP report, but this appears to be a brief respite. A quiet start to the week sees just the Canadian Ivey PMI on the calendar of notable events.

Economic Data

Elsewhere, the US has trade, consumer credit, preliminary Michigan Sentiment and annual consumer price index (CPI) inflation rate revisions, Germany publishes its delayed CPI data along with factory orders and industrial production data while China provides its inflation updates.

Companies

We are knee-deep in company earnings this week, particularly from the US, where the likes of Disney, PepsiCo and MGM Resorts will provide a guide to consumer confidence in these disrupted times. Similar insights from Europe will be provided by Carlsberg on Tuesday and Pandora on Wednesday.

AP Møller-Maersk reports figures on Wednesday and investors will be eager to hear what new chief executive Vincent Clerc plans to do with what is now the world’s second-largest container shipping company. It is challenging times for Maersk given the rather sudden and sharp downturn in container shipping rates.

Key economic and company reports

Monday

§     EU, December retail sales figures

§     Germany, December factory orders

§     UK, S&P Global/Cips construction purchasing managers’ index (PMI) data

§     Results: Activision Blizzard Q4, Anima FY, JFE Holdings Q3, Pinterest Q4, Sumitomo Corp Q3, Take-Two Interactive Software Q3, Tyson Foods Q1

Tuesday

§     Canada, Bank of Canada governor Tiff Macklem speech at the CFA Society Québec

§     France, December trade balance data

§     Japan, December current account and trade balance data

§     Switzerland, January unemployment figures

§     UK, January BRC-KPMG Retail Sales Monitor

§     US, December consumer goods and services trade balance data

§     Results: BNP Paribas FY, BP Q4, Carlsberg FY, Nintendo Q3, SoftBank Q3, Suzuki Motor Q3,

Wednesday

§     China, monthly crop outlook

§     France, Q4 private sector payrolls data

§     India, central bank rate-setting meeting

§     Poland, monetary policy committee’s rate-setting meeting

§     Results: ABN Amro Q4, Adyen H2, AP Møller-Maersk Q4, Ashmore H1, Barratt Developments H1, Bunge Q4, CVS Health Q4, Equinor Q4, Fox Corp Q2, MGM Resorts Q4, Pandora Q4, Smurfit Kappa FY, Société Générale Q4, Walt Disney Company Q1, Yum Brands Q4

Thursday

§     Germany, Harmonised Index of Consumer Prices (HICP) inflation rate data

§     Mexico, consumer price index (CPI) inflation rate data

§     UK, RICS January house price data

§     US, unemployment claims

§     Results: Aegon Q4, ArcelorMittal Q4, AstraZeneca Q4, Banca Generali FY, Bellway trading update, Bombardier FY, British American Tobacco FY, Compass Group Q1 update, Crédit Agricole FY, Credit Suisse Q4, Deutsche Börse Q4, Enel FY, Equifax Q4, Expedia Q4, Kellogg Q4, L’Oréal FY, MediobancaH1, Nippon Steel Q3, Nissan Motor Q3, PayPal Q4, PepsiCo Q4, Philip Morris Q4, Ralph Lauren Q3, Redrow H1, Siemens Q1, Toyota Q3, Unilever Q4, Volvo Q4, Willis Towers Watson Q4, Zurich InsuranceFY

Friday

§     China, January CPI and producer price index (PPI) inflation rate data

§     Russia, key interest-rate decision

§     UK, flash Q1 GDP figures

§     UK, December trade balance data

§     UK, December industrial production data

§     US, February University of Michigan sentiment figures

§     Results: Aker BP Q4, Eneos Q3, Honda Motor Q3, Saab Q4

Our market bias at the moment:

There are no two ways about it- most of our traders want the markets to SELL OFF from here.

Many of the portfolios on The Portfolio Platform now have a SHORT SELL BIAS within their strategies.

Some have taken advantage of a rising market this year (particularly in the first couple of weeks of 2023), but over the last week or two, we have definitely spotted a change in sentiment on our platform.

Timing a short sell trade is often hard to time particularly when momentum is strong on the buy side, but if (and hopefully when) they call this potential retracement right- it's a huge advantage of having a portfolio on TPP. If the markets drop, what does your wealth manager do? On TPP- we find that on the 4-5 occasions per annum where we have an overall short sell bias- that it's often the difference between a strategy that performs reasonably- and one that performs excellently.

After a solid end to 2022, and a particularly pleasing Q4- our traders and trading teams will be keen to start 2023 on the front foot with a strong Q1.

Whether global markets bounce back this year, or trade in a range- our traders are tasked with achieving a minimum of 2 x their market benchmark per annum.

Here is to a great Q1.


If you currently have an underperforming portfolio elsewhere, or are holding cash whilst waiting for an entry point- contact our team for a FREE market consultation.

Join the investment revolution.

‍