The market’s focus in the coming week turns toward fourth-quarter earnings, which are expected to reveal stronger profit growth for economically sensitive stocks compared to technology players.

The earnings period could test a theory that value and cyclicals are set to outperform tech stocks. It will also be a time when investors get a firsthand look at how companies are dealing with inflation, which rose 7% on an annualized basis during the final month of 2021, as measured by the consumer price index.

“Earnings are expected to come in at 20% growth year-over-year. The companies will probably beat that ... and will come in at 25% to 30%,” said Jonathan Golub, Credit Suisse chief U.S. equity strategist. (CNBC - Continue Reading)

Europe is gripped by one of the worst energy crunches in history, forcing politicians to step in as soaring prices threaten to leave millions of households unable to pay their bills.

But with market forces signaling that the crisis will last way beyond the winter, the dilemma facing leaderships is that their stopgap measures are unlikely to be enough. The cost of electricity and gas across the continent already looks like one of the biggest challenges facing nations as they navigate their way out of the pandemic.

Ministers in the five biggest European economies — Germany, the U.K., France, Italy and Spain — have so far come up with a patchwork of grants and time-limited tax cuts to help consumers heat and power their homes. Indeed, the common thread seems to be to hope the problem goes away while also leaning more on companies. (Bloomberg - Continue Reading)

China's central bank on Monday unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, while some market analysts expect more policy easing this year to cushion an economic slowdown.

The People's Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.

Thirty-four out of the 48 traders and analysts, or 70% of all participants, polled by Reuters last week predicted no change to the MLF rates in January, with the rest betting on a rate cut. (Reuters - Continue Reading)