Wall Street indexes ended the last week with increases, breaking the four-week losing streak, but still heading to the worst performance in December since 1931. S&P 500 wiped out 9.9% of its value for the month, while Dow Jones Industrial Average was down by 9.7%.
Growth-oriented sectors like tech or communications services have typically dominated year-end roundups of investment ideas. But an uncertain economic outlook and concerns the bull market’s roar is morphing into a bear’s growl have more Wall Street banks telling investors to play it safe.
Nasdaq is now in a bear market, having recently slid more than 20% from its record high in late August, and the S&P 500 earlier this week was just a stone’s throw from a bear territory.
As this week is shorter for most financial markets, the economic calendar does not offer plenty of important news and events. However, at the beginning of the month, the market participants’ attention will be focused on the US labour market report, which will be released on Friday.
Upcomming economic data
At the beginning of the week – the last working day for 2018 – there will be interesting news from China, such as the official production and non-production PMI index and the same indicators of the Caixin media group. Some major markets, like Germany, will remain closed. In London, the stock exchange will work only half-day.
Tuesday, which is the first day of 2019, is a holiday for all major financial markets and virtually no economic events are expected.
On Wednesday there are some important data, among which we highlight the manufacturing PMI indexes from all over the world – Europe, the US and China.
On Thursday, the focus is on the PMI index for the construction sector of the British economy. In the US, the markets will monitor in particular ADP data on private sector employment, which is seen as the precursor to the official report on Friday. In addition, the ISM’s production PMI index and sales data for new homes will be published.
On Friday, January 4, we expect the PMI indexes for service sectors of the Eurozone countries as well as the EU as a whole.
Lates, in the US, will be published an important report for the labour market for December. The average hourly earnings will be monitored with analysts predicting revenue growth of 0.4% on a monthly basis, with a market consensus of 0.3%. With regard to the number of new jobs by the Dutch bank, the estimate is for 165,000, which is below the market expectations of 175,000. The unemployment is likely to remain at 3.7%, as in the last 3 months.
Upcomming corporate reports
After the holidays, the corporate reports are returning with the beginning of the new year.
On Thursday, January 3, will be posted the financial statements of British multinational clothing company Next Group Plc, the US manufacturer Park Electrochemical Corporation and the American pharmaceutical company Flexion Therapeutics.
On Friday, January 4, the markets will monitor the financial statements of biopharmaceutical company MannKind Corporation and the US building material company RPM International. During the day will be published also the reports of Lamb Weston Holdings and Cal-Maine Foods.