Dubai: With companies worldwide reporting earnings in full swing, investors will keep an eye for how businesses are coping with the current crisis, while keeping a watch for some key economic data as well.
Joe Biden steps into office as the 46th US president on Wednesday. Markets will see how both Biden’s plan to combat the health crisis and his proposed $1.9 trillion stimulus package will fare, which political strategists expect is a package that will be passed but not before it is trimmed down.
Stock markets have risen roughly 13 per cent post-Election Day on November 3 – the biggest S&P 500 gain between the election and the inauguration for any president going back at least to 1952, according to US-based investment research firm CFRA.
Earning season in full swing
Additionally, earnings season in the world’s largest economy – the US – is now in full swing, with more banks reporting numbers as well as giants like IBM and Netflix. In the UK, there are more UK trading statements to provide detail on fourth-quarter’s corporate performance.
The big US banks kicked off the latest earnings season with JPMorgan, Citigroup and Wells Fargo out with reports on Friday, just a sampling before next week’s rush, which includes reports from industry titans such as Bank of America, Goldman Sachs and Procter & Gamble.
Meanwhile, on the global economic front, some news expected next week from some parts of the world includes the data on Germany’s key economic ZEW index, UK inflation and the first European Central Bank meeting of 2021 – which will be closely watched for hints on economic health amid the crisis.
Tense backdrop pre-inauguration
As a result of an earlier mob attack on the Capitol building, there will be heightened security surrounding the inauguration and investors will keep an eye for any news stemming from such caution.
Last week it was voted to impeach current US President Trump for inciting the mob, and now there is concern about further incidents in Washington or at state capitals.
Markets are also watching carefully to see whether Biden can bridge some of the deep government divide, although, stock markets are seen doing well with the Biden presidency. The S&P 500 has gained an average 11 per cent in the first year of a Democratic president, but just 6 per cent for Republicans.
Mixed day of trading in UAE
While the bourse in Dubai slipped on Sunday, the index in Abu Dhabi edged up, as investors factored in some pandemic-related uncertainty seen in global markets.
The Dubai Financial Market (DFM) slipped 0.4 per cent to 2,690 points, while the Abu Dhabi Securities Exchange (ADX) gained 0.2 per cent at 5,279 points.
Oil prices last slid by the most in three weeks and closed down at $55.10 a barrel on Friday after surging nearly 9 per cent since the world’s biggest oil exporter surprised the market on January 5 with voluntary output cuts of 1 million barrels per day in February and March.
The region’s largest bourse - Saudi Arabia’s Tadawul – slipped 0.3 per cent on Sunday, while the benchmark in Qatar slipped marginally.