Knight Investment Limited – What to Watch in the Week Ahead – US Markets

Last week, all three of the major indices posted their first four-day winning streak since August.
No US Delegation Heading to Davos, 2019
No US Delegation Heading to Davos, 2019
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HONG KONG - Jan. 20, 2019 - PRLog -- Both the Dow and S&P 500 closed the week 2% higher. According to Bespoke, this is the best start to a year for the S&P 500 since 1987.

So far, about 13% of the S&P 500's market cap has reported Q4 earnings. "Earnings are beating by 1.7%, with 70% of companies exceeding their bottom-line estimates. This compares to 4.9% and 70% over the past 3 years," Jennifer Harris, Chief US Analyst at Knight commented in a note to clients on Friday.

Next week, markets will be closed on Monday, January 21 in observance of Martin Luther King Jr.'s birthday and will reopen for trading on Tuesday, January 22.

World leaders will gather at the annual World Economic Forum (WEF) meeting in Davos, Switzerland on Tuesday, January 22 to Friday, January 25. The sharpest cultural, business and political minds will meet to discuss this year's theme of "Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution." President Trump was originally scheduled to attend Davos but canceled his trip and also canceled the White House delegation's trip.

Additionally, on Saturday afternoon President Trump proposed a plan to Congress to compromise on the border wall and end the government shutdown. Some of the proposed plan included $800 million in urgent humanitarian assistance, $805 million for drug detection technology, 2,750 border agents and law enforcement officials and 75 new immigration judge teams to reduce court backlog of 900,000 cases.

The president also claimed that Senator Mitch McConnell will put the plan on the Senate floor this week.

As the partial government shutdown enters week five, economists officially began to worry. Many economists had largely shrugged off the economic impact of the shutdown until just this week.

"We have long argued that, rather than trade policy, an extended Federal government shutdown would be the key downside risk to the economy this year. Sure enough, the current stand-off is already the longest on record and is prompting many forecasters to slash their estimates for first-quarter GDP growth," Said Harris.

Week two of earnings season will kick off on Tuesday with some big companies releasing their Q4 financial results. The biggest names reporting next week are as follows:

Earnings calendar

Monday: N/A

Tuesday: Halliburton, Johnson & Johnson before market open; Capital One Financial, International Business Machines, TDAmeritrade after market close

Wednesday: Abbott Laboratories, Comcast, Kimberly-Clark, Procter & Gamble, United Technologies before market open; Canadian Pacific Railway, Ford, Las Vegas Sands, Texas Instruments, United Rentals after market close

Thursday: American Airlines, Bristol-Myers Squibb, Freeport-McMoran, Jetblue Airways, Union Pacific before market open; Alaska Air, Discover Financials, E*TRADE Financial, Intel, Norfolk Southern, Starbucks, Western Digital after market close

Friday: AbbVie, Colgate-Palmolive, D.R. Horton.

Economic calendar

Monday: Markets will be closed in observance of Martin Luther King Jr.'s birthday

Tuesday: Existing Home Sales, December (5.24 million expected, 5.32 million prior)

Wednesday: MBA Mortgage Applications, week ending January 18 (+13.5% prior); FHFA House Price Index month-on-month, November (+0.3% expected, +0.3% prior); Richmond Fed Manufacturing Index, January (-3 expected, -8 prior)

Thursday: Initial Jobless Claims, week ending January 19 (215,000 expected, 213,000 prior); Continuing Claims, week ending January 12 (1.737 million prior); Bloomberg Consumer Comfort, week ending January 20 (58.1 prior); Markit US Composite PMI, January (54.4 prior); Markit US Manufacturing PMI, January (53.5 expected, 53.8 prior); Markit US Services PMI, January (54.0 expected, 54.4 prior); Leading Index, December (-0.1% expected, +0.2% prior); Wholesale Inventories month-on-month, November

Friday: Durable Goods Order, December (+1.5% expected); Durables excluding transportation, December (0.0% expected); New Home Sales, December (554,000 expected)

For our latest recommendation for 2019, contact an advisor today!

To find out more information on the opportunities Knight Investment Limited see's within the US or Chinese markets, or to arrange an appointment to discuss your strategy for 2019, contact us today at or visit our website to find out more about their services and products available.

Knight Investment Limited
Jason Fong
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