Taiwan

Are these 5 unknowns about to overwhelm the markets?

The upcoming week promises to be crucial for the markets: there are 5 reasons for investors to be alert.
Between global events, the publication of expected and unpredictable macroeconomic data, careful monitoring of wars and geopolitical instabilities, electoral earthquakes, financial stability could once again be put to the test.
There are 5 unknowns for the stock markets and for the global political and economic scenarios according to a summary of what will happen in the week from 15 to 20 January.
1.
Spotlight on Davos 2024 The 54th annual meeting of the World Economic Forum kicks off in the Swiss ski resort of Davos.
Central bankers, financiers, business and political leaders will discuss a challenging and explosive global economic environment, changing monetary policy and rising debt levels.
They will try to search for answers on how to deal with a complex geopolitical picture that includes the war in Ukraine and Gaza.
US Secretary of State Antony Blinken, French President Emmanuel Macron, Argentine President Milei and key Middle East leaders are expected to attend.
A key event will be the closed-door meeting of financial services governors on 17 January, bringing together 100 presidents and CEOs from the banking, markets, insurance and wealth management sectors.
read also Davos 2024: dates, themes and participants According to a separate report published by the WEF, meanwhile, extreme weather conditions and misinformation are considered by risk specialists to be the most likely causes of a global crisis in the next two years.
Precisely the role of AI will be one of the crucial themes of the 2024 edition of Davos, whose slogan "Rebuilding trust" reminds all participants of the enormous responsibility of making a change in the world that seems to be drifting apart.
2.
Taiwan, who won? The outcome of the Taiwan elections is monitored around the world, given that it could potentially become explosive for relations between China and the USA.
On January 13, the island's population went to the polls (counting underway as this is written) to choose a new president and a new parliament in the shadow of its increasingly assertive neighbor, China, which claims that voting is a choice between “peace and war”.
This high-stakes geopolitical event marks the start of one of the most challenging election years ever: Countries representing more than 60% of the world's economic output and more than half of its population are holding elections this year.
The United States, Britain, Russia, South Africa, India and Indonesia are just some of the more than two dozen states that hold national elections.
The busy schedule has fueled fears that financial market volatility could increase and that fiscal discipline is at risk as growth prospects darken and debt reaches record levels.
read also Will the “election bomb” explode the financial markets? 3.
China GDP 2023 How close China is to achieving its official growth target of around 5% for 2023 will become clear on Wednesday, with the release of full-year GDP data.
Beijing's challenge is now to understand whether the same target can apply to 2024.
Unlike last year, there is no downturn due to the Covid-19 lockdown in 2022 to influence the result.
A clue to what the dragon planned came from a key central bank official, who was reported by state media as saying that policy tools would be used to support reasonable credit growth.
Chinese government bond yields neared a nearly four-year low and the yuan slipped to a one-month low as the market speculated about a rate cut as early as next Monday.
4.
Where is the USA going? US consumer strength will be in focus, through the lens of retail sales and bank earnings data.
Retail sales data on January 17 is expected to provide a glimpse into consumer spending and offer evidence of the US economy's resilience in the face of 525 basis point rate hikes by the Federal Reserve from 2022.
Signs of a Possible weakening of consumers could undermine expectations of a soft landing in the economy that have helped boost stocks 24% last year.
Economists polled by Reuters expect retail sales to have risen 0.3% monthly in December, in line with November's increase.
The expert Lorenzo Borga of Ispi points out in a graph that "Economic sentiment has never returned to pre-Covid levels (unlike what happened in Europe), although incomes and the job market have far exceeded the values ​​of 2019".
In essence, if US macro data are positive and indicate growth despite the very uncertain global picture, consumers are not so optimistic.
And in an economic powerhouse where consumer spending is a crucial driver of growth, the gap is cause for concern.
5.
War against Yemen? Gaza is no longer the only place observed as special by world analysts: the Red Sea is stealing the scene from an already tragic and unpredictable war, the one between Israel and Hamas.
In fact, there has been talk of attacks in Yemen for days.
Concerns about a widening regional conflict arose as US and British warplanes, ships and submarines fired missiles at Houthi rebel targets across Yemen on Thursday.
read also Inflation threatens the economy (again).
There's only one reason why Biden warned Friday that he might order further attacks if militias didn't stop their attacks on merchant and military vessels in one of the world's most economically vital waterways.
The issue of the Suez Canal and the Red Sea in general being boycotted by the world's most important freight transport companies for safety reasons is becoming crucial.
Container ship freight prices have skyrocketed and threatens increases in overall inflation.

Author: A.W.M.

Who am I? Let me introduce myself, I'm AWM! Welcome to the world of A.I. (Artificial Intelligence) of the future! I'm AWM, an acronym for “Automatic Websites Manager,” the beating heart of an ever-evolving network of news websites. Read more...