Top 5 things to watch in the market next week By Investing.com

Investing.com – Inflation data this week may tempt investors to deal with the backdrop of Friday’s strong jobs report and uncertainty about Donald Trump’s policy plans. Earnings season is underway, and oil prices are at multi-month highs as energy suppliers prepare for supply disruptions. Here’s your take on what’s happening in the market for the coming week.

1. Inflation data

With the resumption of inflation one of the main risks facing equity markets Wednesday’s CPI data will be closely watched.

Markets have pushed back expectations for the Federal Reserve’s next rate cut until June after Friday’s unexpectedly strong jobs report showed wages rose last month, more than forecast. first by 160,000 and down 4.1%.

Economists expect the December CPI to show a year-on-year increase.

Although the Fed was confident that inflation was measured enough to start reducing interest rates in September, the annual inflation rate is still above the Fed’s 2% target. The Fed now projects that inflation will rise by 2.5% in 2025.

Minutes from the Fed’s latest meeting, released on Wednesday, showed policymakers are concerned Trump’s policies on trade and immigration could prolong efforts to bring inflation back to target.

2. Big banks create dividends

JPMorgan (NYSE: ), Wells Fargo (NYSE: ), Citigroup (NYSE: ) and Goldman Sachs (NYSE: ) will report fourth-quarter earnings on Wednesday, while Bank of America (NYSE: ) and Morgan Stanley (NYSE: ) reported results on Thursday.

Stronger investment bank rates, stronger corporate income and less pressure to raise deposit rates are all expected to keep US banks’ earnings higher.

Expectations for bank results were also boosted after Trump’s election victory. The president-elect is expected to bring a wave of deregulation and business-friendly tax changes, which could significantly improve bank profits.

The company’s earnings are expected to rise about 10% in the quarter from last year, according to LSEG IBES data cited by Reuters.

3. UK inflation

Wednesday’s UK inflation data will be in focus after last week’s sell-off in UK government bonds, known as gilts, increased pressure on the new Labor government as it seeks to revive the depressed economy.

British government bond yields have been rising steadily since September, reflecting reduced expectations of a rate cut by the Bank of England, to lend more money in the Oct. 30 government budget.

The December CPI is expected to show an annual increase of , which remains above the Bank of England’s target of 2%.

Comments from BoE officials will also come to light as Deputy Governor Sarah is expected to speak on Tuesday with MPC member Alan Taylor due to comment the following day.

4. China facts

China will release a slew of data ahead of the weekend that will give investors a chance to see how the world’s second-largest economy is faring as it faces a crisis of rising interest rates. of the US.

The data due on Friday is expected to confirm that the economy has met its annual growth target of 5% for 2024, as previously announced by President Xi Jinping in late December.

Beijing should also release data on, and.

China’s Vice Finance Minister Liao Min said Friday that Beijing has enough fiscal policy space and resources to support economic growth this year and will increase spending to encourage investment.

5. Oil fines

Oil prices rose more than 3% to a three-month high on Friday as traders braced for supply disruptions from a wide-ranging package of US sanctions targeting Russian oil and gas revenues .

The administration of President Joe Biden has created new sanctions targeting Russian oil producers, tankers, brokers, traders and ports, with the aim of hitting every step of the oil production and supply chain. of Moscow.

The future settled at $ 79.76 a barrel after crossing $ 80 a barrel for the first time since Oct.7. it can be sold at $76.57 per barrel.

The timing of the sanctions, ahead of Trump’s inauguration on January 20, makes it more likely that he will keep the sanctions in place and use them as a negotiating tool for a Ukraine peace deal, analysts said. said.