Traders at the New York Stock Exchange. With more companies worldwide reporting earnings in full swing, investors will keep an eye for how businesses are coping with the ongoing escalating crisis. Image Credit: Reuters

Dubai: With more companies worldwide reporting earnings in full swing, investors will keep an eye for how businesses are coping with the ongoing escalating crisis, while keeping a watch for some key economic data as well.

US earnings season is now in full flow, and this week sees a host of earnings from a variety of sectors, which analysts say will help to expand the view of the US economy provided mostly by banks so far.

Stimulus optimism wanes

US stocks gained last week on investor optimism for a $1.9 trillion stimulus package, proposed by new US President Joe Biden, however markets lost steam later in the week amid increased concerns about the pandemic’s economic impact, and hints that the stimulus plan may face delay in getting approved.

The proposed multi-trillion stimulus was enough to push more all-time highs from global equity markets, with records in the S&P 500, the MSCI Asia ex-Japan index and Europe’s STOXX 600 close to where it was when the pandemic hit last year, despite a rise in new COVID-19 infections and stricter lockdowns.

US corporate giants Apple, Facebook, Microsoft, Tesla and over 100 other S&P 500 firms report earnings in the biggest rush of earnings reports this quarter. Elsewhere, fourth-quarter corporate earnings releases are picking up steam, which investors in in most key economies will closely monitor.

US Fed meets this week

The US Federal Reserve meets this week and new gross domestic product (GDP) data will show the state of the world’s largest economy at the end of the year. In other economic data, UK employment figures, along with the Germany’s Business Climate indicator (IFO) index and US durable goods orders are due.

Economists don’t expect the Fed to take any action or change in its dovish tone when it releases its statement on Wednesday, following its two-day meeting. The US economy’s fourth quarter GDP figure is to arrive on Thursday, and it is expected to show growth of 4.4 per cent to 4.7 per cent.

After having contracted by a record 3.1 per cent in the second quarter, when coronavirus lockdowns were at their harshest, the economy has since largely bounced back. At the last count, it was still 3.5 per cent smaller than it was before the pandemic struck.

Meanwhile, investors will also keep an eye on Bitcoin prices after the cryptocurrency toppled 12 per cent last week, marking its biggest one-week fall since late August. However, it’s still up nearly 270 per cent in the last 12 months.

Dubai stocks slip

While the Dubai bourse slipped, the benchmark in Abu Dhabi was largely unchanged on Sunday, tracking losses seen across the board in GCC markets elsewhere.

The Dubai Financial Market (DFM) dropped 0.7 per cent to 2,715 points, while the Abu Dhabi Securities Exchange (ADX) stayed largely unchanged at 0.03 per cent up at 5,613 points.

Blue-chip developer Emaar Properties shed 1.2 per cent, while financial stocks drove the losses, led by a Dubai’s biggest lender, Emirates NBD Bank, which was down 0.4 per cent.

Most other Gulf stock markets slipped on Sunday, with Saudi Arabia’s benchmark index down 0.2 per cent and the Qatari index slipping 0.1 per cent. However, Kuwait’s blue-chip index rose 0.6 per cent after the country’s central bank allowed banks to distribute dividends to shareholders.