The earnings season continues this week with important bank earnings reports from Citigroup, Bank of America, Goldman Sachs, U.S. Bancorp and Morgan Stanley, Prudential’s Chief Market Strategist Quincy Krosby said Tuesday in her weekly “Connecting the Dots” outlook. IBM, Tiffany’s and Schlumberger also are reporting.
“Investors are interested in bank guidance; what they see in terms of loan growth, trading opportunities, investment banking and the mergers and acquisitions landscape, interest-rate outlook, and further deregulation,” Krosby said.
Meanwhile, worldwide markets have been enjoying solid to strong performance as “global leading indicators continue to march higher, offering a positive underpinning for markets,” she said.
In Washington, the budget deadline looms at the end of the week, and an agreement must be reached to keep the government open.
“Expectations are they will find a way to do it,” Krosby said. “If they don’t, that will surprise the market.”
With the sixth round of NAFTA talks set to begin at the end of January, chatter in Washington focuses on the administration seeking to renegotiate rather than walking away from the trade framework, Krosby said.
“This has been a change of tone coming from the administration,” she said. “We’ll see if it holds.”
The Beige Book is released this week, which will offer an up-to-date anecdotal report of economic conditions across the U.S., she noted.
“The market does pay attention to it, especially if it moves in a meaningful direction one way or another,” Krosby said.
This week’s data releases:
- Wednesday: Industrial production; Beige Book
- Thursday: Housing starts
- Friday: Consumer sentiment
Read Quincy Krosby’s full Q1 Market Commentary: Turning the Page.
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This is solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.