The Week Ahead: Markets On Tenterhooks

All eyes will be on the newly-appointed chair of the Federal Reserve, Jerome Powell, and other Fed officials next week. The market will be looking to them to calm investors nerves, after the worst one-day stock market points-drop since 2016.

The slump was triggered by speculation that Powell could raise US interest rates faster and more aggressively. This followed news that US wages were accelerating in a tight labour market. Average earnings rose 2.9% year-on-year.

It will be time for another set of China trade numbers. The trade surplus for December was much higher than market expectations. It widened from US$40.5 billion a year ago to US$54.7 billion.

China will also report inflation figures for January. This is expected to show a slight moderation in consumer price rise from 1.8% to 1.7%.

The Bank of England has an interest-rate decision to make. Not many are expecting the UK central bank to hikes rates in February. The bank has previously said that interest rates would only increase modestly over the next few years.

After a quite week, the Singapore earnings season returns with gusto, starting with Hutchison Port Holdings (SGX: NS8U). In October, the port owner posted a 37% fall in third-quarter profits. HPH will report on Monday.

Singapore’s biggest bank, DBS Group (SGX: D05), threw everything including the kitchen sink in November at its provisions for doubtful debts to the oil and gas sector. That pushed down profits in the third quarter by 25%. But the bank said loan growth is likely to be between 7% and 8% in the current year and next. DBS will report on Thursday.

Singtel (SGX: Z74) is also pencilled in for results on Thursday. In November, Singapore’s biggest telecom operator posted a near three-fold increase in earnings for the second quarter. That was thanks to the sale of its 75% stake in Netlink Trust (SGX: CJLU). At the operating level, revenues rose 7%. However, underlying net profit slipped 4%.

And finally, the Singapore market could react badly on Monday, following the Friday’s slump in US shares. In points terms, it was headline definitely grabbing. But in percentage terms, it was much ado about nothing.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned. The Motley Fool has recommended DBS.