5 Important Developments to Watch Next Week

5 important developments to watch next week have been compiled. The focus of the markets will be earnings reports and the US stimulus package.

In addition to the earnings reports expected to be announced next week, US investors will watch with interest the incentive package developments expected to be given as part of the fight against coronavirus. On the other hand, news about vaccines whose distribution is accelerating and inflation data to be announced on Wednesday will be followed. In addition, Mario Draghi, former president of the European Central Bank (ECB), will continue negotiations with the aim of forming a new Italian government. Here are 5 important developments to watch next week:

1. Earnings Reports

As the announced fourth quarter results were above expectations, analysts' expectations also rose. Accordingly, analysts share the outlook that S&P 500 companies will rise contrary to the initial expectation. Reports from the US next week include Cisco Systems (NASDAQ: CSCO), Twitter (NYSE: TWTR), General Motors (NYSE: GM), Pepsi (NASDAQ: PEP), Coca-Cola (NYSE: KO), AstraZeneca (NASDAQ). : AZN) and Walt Disney (NYSE: DIS). The S&P 500 and Nasdaq showed the biggest weekly percentage increase since the US election in November, thanks to the acceleration of stimulus package efforts and vaccine distribution, as well as better-than-expected earnings reports.

2. Stimulus Package in the USA

US President Joe Biden's $ 1.9 trillion Covid-19 stimulus package accelerated on Friday. A budget plan that would allow Democrats to pass the law through Congress in the coming weeks, with or without Republican support, was almost approved in the US Senate. Congressional committees will start preparing the legislation this week, and President Nancy Pelosi predicts that the final law can be passed in Congress before March 15, when private unemployment benefits, which were increased during the epidemic, will end. Current data showed that the US labor market rebounded below expectations in January, proving how much the stimulus package was needed.

3. Inflation Data Will Be Announced

The markets will monitor the CPI data, which will be released Wednesday, with the expectation that inflation will be more than the Fed's forecast. The possibility of a new stimulus package also raises inflation expectations. FED President Jerome Powell, on the other hand, will speak on the labor market Wednesday at a webinar hosted by the New York Economic Club. The first unemployment applications to be announced on Thursday will also be among the focus of attention.

4. UK GDP Data Will Be Announced

Data on Friday is expected to show that the UK continued to grow in the fourth quarter. However, it is predicted to be at a level lower than the 16 percent growth rate seen in the previous quarter when the economy reopened. Economists expect 0.5 percent growth on a quarterly basis, but this is an estimate made before quarantine measures are implemented. So a new decline can be seen. The Bank of England (BoE) lowered its growth forecast for 2021 from 7.25 percent in November to 5 percent; For 2022, it increased its growth forecast from 6.25 percent to 7.25 percent.

5. Mario Draghi (Super Mario) to Form New Government in Italy

Described as the person who saved the Euro from collapse when the Eurozone was in a public debt crisis in 2012, Mario Draghi was tasked with establishing a new government in Italy. Investors think that Draghi can make reforms to accelerate growth in a country that has long been low compared to its European counterparts. Italian markets jumped with expectations that Draghi will be successful. Last week, Italy's 10-year bond yield showed the biggest weekly decline since July, while the gap with the German Bund yield fell to a five-year low.       Source: Investing.com