Asia week ahead: US earnings, Chinese growth

Unexpected turns in political events swayed markets in the past week.

US Trader
Source: Bloomberg

From the relieving of tariffs tensions between US and China to the roller coaster ride with President Donald Trump’s Syria strike warnings, politics had been the epicentre for sending tremors through markets. Into the fresh week, these will remain themes to monitor alongside the barrage of data including China’s first quarter growth results.

Risk vs earnings

Markets across the globe had been broadly reactive towards politics in the week, with risk sentiment evidently improving into the end of the week as both the US-China trade tension and Syria strike issue saw reasons for relief. Nevertheless, both items still hold uncertainties ahead, which keep them among the top few in the list of items to note when managing our monies in the coming week. A report from the Wall Street Journal citing that the US administration is looking to draw up the list of items for the latest tariffs plan on $100 billion of Chinese imports clouds the outlook for stock market bulls. 

That being said, the long-awaited earnings factor would finally come into play with the first of bank earnings imminent release this Friday in the US. JPMorgan Chase and Co. and Citigroup Inc. will be leading the stream of US earnings and approximately 12% of the companies on the S&P 500 index will be joining next week. Some of which worth watching includes Netflix Inc., International Business Machines Corp. and General Electric Co. among others. As mentioned last week, high expectations are in place at around 17% according to FactSet for Q1 earnings growth, one to assess in the weeks to come. Do note the slew of economic indicators as well, including US retail sales results on Monday in addition to a series of Fed speakers.

For prices that have been caught in a state of consolidation, both the S&P 500 and Dow in the US have exhibited signs of upward momentum into the end of the week. Look to the sustaining of this short-term uptrend.

Asia indicators

The Asian region would find ample amount of economic indicators to track with notable attention landing on China’s first quarter growth results. Expected at 6.8% year-on-year, China’s Q1 GDP is likely to have kept steady from the previous reading. More importantly, accompanying the release will be China’s March retail sales, industrial production and fixed asset investments data, the first of which since the Chinese New Year holidays. This would offer better insights into how the economic conditions had been trending as compared to the headline GDP which could find corresponding market reactions here in Asia.

Besides the abovementioned, Singapore’s non-oil domestic exports will also be seen on Tuesday, coming at the heels of the latest Q1 GDP surprise. NODX is expected to pick up from February’s decline, one for the local market to watch though external leads may play a more significant role given that the impact is likely to have been priced in after this week’s growth numbers.

Bank Indonesia meets in the coming week with no change expected. Towards the end of the week, it will be Japan’s inflation results to observe, with consensus pointing towards a slowdown that would reinforce the current monetary policy conditions and support for USD/JPY.

Denna information har sammanställts av IG, ett handelsnamn för IG Markets Limited. Utöver friskrivningen nedan innehåller materialet på denna sida inte ett fastställande av våra handelspriser, eller ett erbjudande om en transaktion i ett finansiellt instrument. IG accepterar inget ansvar för eventuella åtgärder som görs eller inte görs baserat på detta material eller för de följder detta kan få. Inga garantier ges för riktigheten eller fullständigheten av denna information. Någon person som agerar på informationen gör det således på egen risk. Materialet tar inte hänsyn till specifika placeringsmål, ekonomiska situationer och behov av någon specifik person som får ta del av detta. Det har inte upprättats i enlighet med rättsliga krav som ställs för att främja oberoende investeringsanalyser utan skall betraktas som marknadsföringsmaterial. Se fullständig friskrivning och kvartalsvis sammanfattning.

Artiklar av våra analytiker

CFD-kontrakt är komplexa instrument som innebär stor risk för snabba förluster på grund av hävstången. 76 % av alla icke-professionella kunder förlorar pengar på CFD-handel hos den här leverantören. Du bör tänka efter om du har råd med den stora risken för att förlora dina pengar. Optioner är komplexa finansiella instrument och du riskerar ditt kapital. Förluster kan ske extremt snabbt. CFD-kontrakt är komplexa instrument som innebär stor risk för snabba förluster på grund av hävstången.