This week in the US, important economic indicators will be released, including December inflation readings and GDP estimates, while Tesla and Netflix earnings reports are expected to take center stage. Additionally, several other companies in the S&P 500 will report their earnings.
On Thursday, early manufacturing activity data for the US and other economies, including Australia, will be published. On Friday, the first estimate of the fourth-quarter US GDP and personal consumption expenditures data will be released, providing insight into inflation trends. A higher-than-expected reading may signal a prolonged period of higher interest rates, while a lower reading could reignite calls for rate cuts.
Moody's economists anticipate a modest rise in the deflator and a slowdown in GDP growth compared to the previous quarter. Other economists have varying forecasts, but a common theme is a noticeable deceleration in economic activity.
Netflix is expected to report strong subscriber gains, particularly in its ad-supported streaming service. Tesla, on the other hand, faces challenges with price cuts, rising costs, and increased competition from BYD in the electric vehicle market. The outlook for EVs remains uncertain, with Tesla shares declining due to various factors.
Several other US and global companies, including tech giants like Intel, Texas Instruments, and IBM, as well as airlines and defense stocks, are also set to report their earnings this week. Additionally, major consumer products companies like Colgate Palmolive, Procter and Gamble, and Johnson and Johnson will release their financial results.
In Europe, the European Central Bank's policy conference is scheduled for Thursday, with economists not anticipating any changes. However, ECB President Christine Lagarde has hinted at a possible rate cut in the summer, depending on inflation data.
In Australia, the National Australia Bank's monthly business survey and the RBA Bulletin are expected to provide insights into the country's economic conditions. Resmed, Fortescue Metals, South32, Woodside, and Santos will release their quarterly production and sales reports, with the latter two companies likely to face questions regarding their merger talks. New Zealand will release its fourth-quarter and 2023 inflation figures, with expectations of a slight decline in inflation compared to the previous year.
