Home > Market update: European shares up, US markets closed plus key events to watch this week

Market update: European shares up, US markets closed plus key events to watch this week

US markets will remain closed on Monday, with the week light on the data front but here is what might move stocks this week:

  • Q4 earnings

  • UK inflation data

  • Central banks policy statements

The week sees earnings across several US companies, including Goldman Sachs and Netflix. Investors are also likely to watch Chinese policymakers’ steps after its GDP data showed the economy grew 4% in Q4 and 8.1% last year. 

The Shanghai Composite rose 0.58%, while the Shenzhen component jumped 1.5% to lead gains across the Asia-Pacific region. Japan’s Nikkei 225 rose 0.74% while Australia’s ASX 200 gained 0.32%. South Korea’s Kospi however dropped 1.09% and Hong Kong’s Hang Seng index fell 0.68% to highlight continuing weakness in the stock market.

European markets have opened higher, with the FTSE 100 up 0.66% and the pan-European Stoxx 600 index +0.57%. Germany’s DAX and France’s CAC also lead other European bourses in posting a positive start to the week, respectively up by 0.4% and 0.62%.

With data light on Monday, the markets will likely be focused on what lies ahead this week.

Apart from Q4 earnings, UK inflation data for December as well as the language and tone of the ECB in its minutes for the December meeting will highlight key events to watch this week.

Central bank policy statements

Bank of Japan will release a statement on inflation on Tuesday, with a recent spike in prices a key segment to comment about. This will come at the end of a two-day meeting that starts on Monday.

On Wednesday, the Bank of England Governor Bailey will speak, with markets likely to focus on his comments on inflation after the BoE surprised last December with an interest rate hike.

On Thursday, the European Central Bank will publish minutes of the bank’s December meeting. While the eurozone central bank chose to stick with the existing stimulus measures rather than raise rates, investors will be keen on details of what policymakers think about rising consumer prices across member states.

Q4 earnings results

The stock market has so far had a bumpy start to 2022, with tech and growth stocks seeing the most pain. But investors will be keen on the earnings season for a positive trigger ahead of Fed's rate hikes.

Stock markets will also look to ride strong earnings to help stall the surge in Treasury yields, a scenario that has historically hampered growth stocks.

On Tuesday, Goldman Sachs will highlight Q4 earnings in the financial sector, with others scheduled to report being Charles Schwab and BNY Mellon.

Wednesday will see the Bank of America and Morgan Stanley report. Also scheduled for Wednesday is Procter & Gamble. FAANG stock investors will also watch out for Netflix, which will report on Thursday.

UK labour and inflation data

UK inflation and labour market data is also out this week, with CPI data out on Wednesday expected to show inflation rose 5.2%. The BoE already penciled in a spike to 6% in early Q2, so labour market details might be the critical information investors need to watch.

The eurozone CPI will be out on Thursday, while Friday sees the UK release details on retail sales.

US markets are closed on Monday for Martin Luther King Jr. day.

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