This Week’s Economic Releases: Big Bank Earnings, Inflation Data & More

The week of January 15th is filled with economic releases from some of the world’s leading economies and financial institutions. 

Let’s take a look at this week’s main upcoming economic events:

China GDP 

On Wednesday, January 17, China, the world's second-largest economy, is expected to release its Q4 Gross Domestic Product (GDP) figures.

Despite a challenging year for the Chinese economy, the GDP, which measures the monetary value of a country’s goods and services, is generally expected to improve. Nonetheless, there still seems to be a lack of consensus between analysts regarding the actual outcome of the anticipated GDP figures. 

On the one hand, whereas analysts from SocGen expect a 5.3% growth and Goldman Sachs’ economists expect 5.6%, Barclays economists predict a less-optimistic percentage of 4.5%. 

Only time will reveal the actual outcomes of this release.

More Chinese Market Movers 

Apart from the mentioned release, it may also be worth noting the recent Chinese developments that might shape China’s economic landscape and affect this week’s trajectory. 

Today, on Monday, January 15, the People’s Bank of China (PBOC), China’s Central Bank, announced its monetary policy decision. The PBOC revealed that it would keep rates unchanged, contrary to earlier market expectations and despite a weaker currency.

Furthermore, it is worth noting that a significant revelation has emerged amid the ongoing technology tensions between the United States and China. It has been disclosed today that specific semiconductor products from NVIDIA (NVDA), which were previously banned from export to China in the past year, have been obtained by Chinese military Artificial Intelligence (AI) research entities.

These acquisitions were made by various entities, including universities and those subject to US export restrictions, such as the Harbin Institute of Technology and the University of Electronic Science and Technology of China.

As such, traders may want to keep tabs on how this revelation might affect Chinese tech companies, in general, and US tech companies, in particular, in the near future. 

Japan CPI 

Another notable event from Asia is the release of inflation data from Japan on Friday, January 19th. The upcoming Consumer Price Index (CPI) release is expected to show a slowdown in inflation rates on an annual basis. 

According to some economists, Japan’s inflation is projected to drop from 2.5% to 2.3% in November, and headline inflation is expected to drop from 2.8%. 

The results of this release can impact the Bank of Japan’s (BoJ) decisions this year as the next BoJ’s first monetary policy meeting is scheduled to take place on  January 22-23. 

Interestingly, the BoJ is expected to maintain its ultra-loose monetary policy intact in this month's meeting as it remains optimistic about the prospect of inflation nearing the 2% target. 

As economic uncertainties persist, whether or not the BoJ will adhere to expectations is yet to be seen.

Big Bank Earnings on the Horizon 

This week will also provide valuable information for stock traders, especially concerning the financial sector, as major banks are scheduled to release their quarterly earnings reports. This follows last week’s releases from JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C). 

This week, Goldman Sachs (GS) and Morgan Stanley (MS) are expected to release earnings on Tuesday, January 16, while Charles Schwab is scheduled to release theirs on Wednesday, January 17. 

According to analyst projections, Morgan Stanley is expected to gain 0.7% in revenue YoY, landing at $12.83 billion, while its EPS is expected to fall by 6%. For Goldman Sachs, analysts expect revenue to be $10.8 billion. 

Regarding Charles Schwab, the Zacks Consensus Estimate suggests the company’s EPS is expected to decline by 37.4% YoY, landing at $0.67, with projected revenues of $4.53 billion, marking a 17.6% fall from the year-ago quarter.

Given last year’s banking sector crisis, these less-than-rosy forecasts might not be surprising to many market watchers.

Other Notable Releases 

Other notable releases to keep in mind may be Wednesday’s Industrial Production, Retail Sales, and Unemployment Rate from China, and Eurozone inflation. 

In addition, US Existing Home Sales and UoM Sentiment on Friday can provide an outlook on the possible trajectory of the world’s biggest economy. (Source: S&P Global)

Conclusion 

In summary, this week features critical economic events, including China's Q4 GDP, Japan's CPI release, and major bank earnings reports. With ongoing uncertainties globally, these developments will be closely monitored for potential implications on the economic landscape and financial markets.