Asia Session Worries: China’s Property Sector and Hong Kong Security Laws
After a labored Asia session, European markets are gearing up for an economic data-packed day. Investor concerns have shifted back to China’s ailing property sector and the potential introduction of tighter security laws in Hong Kong. The leader of the financial hub recently confirmed his intention to pass fresh national security laws, building upon the broad legislation imposed by Beijing in 2020.
European Economic Readings and Company Results
The European session will focus on key economic readings, including GDP numbers for the euro zone, France, and Germany in the last quarter. These readings will provide essential insights into the state of the European economy. Additionally, results from Diageo, the renowned spirits manufacturer behind Johnnie Walker whisky, may offer a clearer perspective on discretionary spending trends.
On a macro level, this week will greatly impact the outlook on interest rates and the overall performance of companies. Numerous firms, including Microsoft, Alphabet, and AMD, will be reporting their earnings throughout the week. Today, Pfizer is another notable company revealing its earnings.
Positive European Market Indications
Despite concerns about China’s property market following the court-ordered liquidation of troubled giant China Evergrande, futures indicate that European bourses are expected to open higher. This positive momentum extends the ongoing rally witnessed this week. The pan-European STOXX 600 index is poised to climb further after recently reaching a two-year high. It has just completed its best weekly performance in three months.
Geopolitical Tensions and Market Influences
Geopolitical tensions have led to a rise in oil prices, while gold is experiencing a surge in safe-haven bids. Investors remain jittery regarding escalating conflicts in the Middle East. Yesterday, White House National Security spokesman John Kirby emphasized that the United States does not seek a broader war with Iran or the region, but they will take necessary action as required.
Key Developments Influencing Tuesday’s Market:
– Economic events: Q4 GDP flash data for the euro zone, France, and Germany; euro zone consumer confidence for January
– Earnings announcements: Diageo, Microsoft, Alphabet, AMD, and Pfizer