Happy Monday. Good Luck out there this week.
Global Spotlight
Wuhan Coronavirus and the Lunar New Year. With Wuhan and 11 other Chinese cities on lockdown to manage the spread of the new coronavirus, developments over the Lunar New Year holiday will be important for the future trajectory and impact of the outbreak.
Brexit Day! Three and a half years after the Brexit referendum, the United Kingdom will leave the European Union on Jan. 31. But this will not be the end of the Brexit saga, because negotiations with the European Union over a free trade deal will start in early March. We expect issues such as Brussels’ pressure for London to remain aligned with EU single market rules, fishing rights and the future of the British financial services market to be the main obstacles to overcome before a trade agreement can be reached.
A Long-Awaited Mideast Peace Plan Arrives. U.S. President Donald Trump intends to meet with Israeli Prime Minister Benjamin Netanyahu and his main political rival Benny Gantz at the White House on Jan. 28 to release some of the major details of the White House’s long-awaited regional peace plan.
French President Makes Call on Sahel Deployment. French President Emmanuel Macron will meet with his security team on Jan. 29 to discuss the country’s current strategy in the insecurity-plagued Sahel region of West Africa.
Italy Holds a Key Regional Election. Italy’s northern Emilia-Romagna region will hold an election on Jan. 26 to appoint the next regional president, in a vote that will have national repercussions.
Central Bank Meetings. The Federal Reserve’s Federal Open Market Committee will meet Jan. 28 and 29 and the Bank of England’s Monetary Policy Committee will meet Jan. 30. The Fed is not expected to change policy, but Chairman Jerome Powell’s post-meeting press conference is an opportunity for him to be more explicit on policy this year, including prospects for further interest rate cuts.
Pompeo Heads to Belarus. U.S. Secretary of State Mike Pompeo will visit Belarus on Feb. 1. His visit comes at a time when Minsk is trying to resist Russian efforts to pull Belarus closer.
India Unveils Its Federal Budget. As India’s $2.6 trillion economy endures a protracted slowdown, Finance Minister Nirmala Sitharaman will present the federal budget for the fiscal year that starts in April on Feb. 1.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- Fourth quarter earnings are expected to decrease 0.5% from 18Q4. Excluding the energy sector, the earnings growth estimate is 2.4%.
- Of the 85 companies in the S&P 500 that have reported earnings to date for 19Q4, 68.2% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 74%.
- 19Q4 revenue is expected to increase 4.5% from 18Q4. Excluding the energy sector, the growth estimate is 5.7%.
- 64.7% of companies have reported 19Q4 revenue above analyst expectations. This compares to a long-term average of 60% and an average over the past four quarters of 58%.
- For 19Q4, there have been 77 negative EPS preannouncements issued by S&P 500 corporations compared to 35 positive, which results in an N/P ratio of 2.2 for the S&P 500 Index.
- The forward four-quarter (20Q1 –20Q4) P/E ratio for the S&P 500 is 18.8.
- During the week of Jan. 27, 141 S&P 500 companies are expected to report quarterly earnings.
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