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LGT Navigator: Kick off to the corporate reporting season

January 14, 2022

On Wall Street, the corporate earnings season begins today with the quarterly financial statements of the major American banks JPMorgan Chase and Citigroup. According to estimates, annual earnings growth for S&P 500 companies in the final quarter of 2021 is expected to be lower than in the first three quarters of the year, but still strong at just over 22%. Even more important than the trailing earnings reports will be corporate outlooks.

Kick off to the corporate reporting season

The rally in technology stocks stalled in New York yesterday, with Nasdaq indexes posting hefty losses of around two and a half percent. Microsoft shares, for example, lost more than four percent. The turnaround in interest rates by the Federal Reserve, which is now becoming concrete, is putting pressure on technology stocks. Previously, Fed Chairman Powell and several members of the Monetary Policy Council had spoken out in favor of a prompt increase in key interest rates. Capital markets are now expecting four interest rate hikes this year and a first hike as early as March. Yesterday, however, also the standard values came under pressure. The broad market S&P 500 lost almost one and a half percent and the Dow Jones Industrial lost half a percent.

On the Asian stock exchanges, the trend continued, and most stock indices recorded losses at the end of the week. In addition to the eagerly awaited first quarterly financial statements of the major US banks, the latest data on retail sales and consumer sentiment in the US are due today. Also, a speech by ECB President Christine Lagarde could provide new clues to the current assessment of the European Central Bank.

Price pressure at producer level reinforces inflation trend in the US 

In the United States, prices at the producer level rose by +9.7% for the year in December, but this had been roughly expected by analysts. Producer prices are being driven primarily by the ongoing shortage of materials and global supply problems. The core rate, i.e. excluding energy, was +8.3%. The rise in producer prices tends to be transmitted to consumer prices with a time lag.

Economic Indicators January 14

MEZ Country Indicator Last period
08:00 UK Industrial Production (November, m/m) -0.6%
08:45 FR Consumer Prices (December, y/y) +3.4%
09:00 ESP Consumer Prices (December, y/y) +6.7%
14:30 US Retail Sales (December, m/m) +0.3%
14:30 EZ ECB President Lagarde 
15:15 US Industrial Production (December, m/m) +0.5%
16:00 US Consumer Sentiment  70.6


Earnings Calender January 14

Country Company Period
US JPMorgan Chase Q4
US Citigroup Q4
US Wells Fargo Q4
US Blackrock Q4


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