US economy

Week ahead: South Carolina primary, coronavirus, Trump in India


Coronavirus updates will remain front and centre for investors this week, but the South Carolina primary, earnings updates and Donald Trump’s visit to India are also likely to dominate headlines.

Here’s what to watch in the coming days.

China

The Standing Committee of China’s National People’s Congress is expected to meet on Monday to consider whether to postpone the annual meeting of parliament, currently scheduled to take place on March 5, due the to the coronavirus outbreak. Key legislation and economic targets are usually unveiled at the annual gathering. The global death toll from the outbreak has exceeded 2,200 and markets have been spooked by the jump in coronavirus cases outside of China.

Trump in India

US president Donald Trump heads to India on Monday for his first official visit to the country. Mr Trump recently said Washington is working on a “very big” trade deal with India.

Relations between Mr Trump and Indian prime minister Narendra Modi have long been amiable but beneath that budding bonhomie have been signs of strain, with the US president also saying the US is “not treated very well by India”. Trade watchers are hoping for a limited trade deal from this visit, but beyond that, tech talk, defence deals and human rights are likely to serve as other major talking points.

FT’s Amy Kazmin has highlighted the key things to watch for as Trump woos India.

US election

With the Nevada Democratic caucuses wrapped up attention shifts to the South Carolina primary on Saturday, with the state awarding Democrats 63 delegates. South Carolina and Nevada together give Democratic presidential hopefuls the chance to prove whether they have broad appeal as they campaign in more diverse electorates.

Moreover, a win in South Carolina would provide Democratic candidates with momentum ahead of Super Tuesday, when more than a third of all delegates for the Democratic National Convention will be up for grabs.

FT’s Ed Luce writes about the slow-motion Democratic train wreck here.

US data

Consumer confidence and inflation data are likely to draw the most attention of the various US economic data points due to be released next week.

Thus far, US consumer sentiment surveys have failed to make mention of the deadly coronavirus outbreak that has hurt companies’ supply chains and is expected to deliver a blow to their earnings. “At this stage, we suspect the impact will be limited given the strong jobs market and the strong performance of asset prices,” strategists at ING said.

The other key data point on investors’ radar will be personal consumption expenditures, the Federal Reserve’s preferred gauge of inflation. Economists project PCE climbed to 1.8 per cent year-on-year in January, from 1.6 per cent previously, leaving inflation shy of the central bank’s 2 per cent target.

The other major data on next week’s calendar include durable goods, which are likely to be depressed by the halt of Boeing 737 Max production, housing data and a second reading of fourth-quarter economic growth.

Earnings

Earnings season in the US is beginning to wind down with just 44 companies in the S&P 500 slated to report results. Retailers take the limelight next week with the likes of Macy’s TJX Cos, Home Depot, Best Buy among the big names reporting results. HP and Salesforce are among the big tech names releasing quarterly earnings.

Outside the US, Baidu, Rolls-Royce, Peugeot, German chemical maker BASF and Standard Chartered are on the docket to report results. Investors can expect to hear updates on the impact of the coronavirus outbreak through the week.



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