Every January analysts, pundits and portfolio managers alike are asked their opinions about the future directions of markets. Last year proved to be particularly tricky on this front, as sluggish activity in Europe and China undermined global growth expectations while simultaneously helping the dollar to rise and by extension, driving yields lower despite Federal Reserve tapering. The year ahead looks to be even trickier to predict. The plunging price of oil calls into question central bankers’ ability to stimulate inflation. With Greece’s elections bringing political push-back on austerity measures back into the limelight, Europe’s prospects appear grim. As the new year gets underway and investors find their inboxes flooded with presentations on what to expect in 2015, perhaps it is worth remembering the admonishment of legendary baseball player and manager Charles Dillon “Casey” Stengel: “Never make predictions, especially about the future.”
Monday, January 5: Data releases on the first day of the first full week of 2015 include German November retail sales and December consumer price index levels. German activity measures have improved in recent months, despite the ongoing regional slump. Consensus forecasts are for prices at the cash register to increase modestly on higher demand despite cheap fuel. In the U.S. Autodata Corp. will release total motor vehicle sales data for December. Analysts are forecasting a marginal slowdown for car sales despite aggressive dealer financing in the lead-up to the holidays.
Tuesday, January 6: Revised HSBC services purchasing managers’ index (PMI) data is scheduled for release in China. Also a focus for Chinese markets will be Australian trade data for November, as investors gauge export demand for raw materials. Markit services PMI index levels for December will also be released for the primary economies in the European Union with forecasts for a modest moderation from flash readings in aggregate. Primary releases for the day in the U.S. include Institute for Supply Management nonmanufacturing PMI and November factory orders.
Wednesday, January 7: Unemployment levels for December in Germany and Italy, as well as aggregate EU consumer price index levels for the month, will be a focus for markets as investors await European Central Bank president Mario Draghi’s next move. Economic indicators to be released in the U.S. include November trade data, weekly Energy Information Administration crude stock levels and employment data from ADP. Minutes from the most recent Federal Open Market Committee, meeting scheduled for release in the afternoon, will be a focus for fixed-income markets as investors look for any marginal shift in Fed language. Missouri-based agrochemicals firm Monsanto Co. will report fiscal first-quarter earnings before the market open. Despite concerns about declining U.S. acreage under cultivation in response to lower grain prices, analysts expect higher seed pricing to partially offset any shift in volume.
Thursday, January 8: In Europe, November factory orders in Germany and aggregate euro zone producer price index data and retail sales for the month will be announced. In the U.K. the Bank of England is expected to keep rates unchanged in its regular monthly announcement. Initial jobless claims will be watched carefully in the U.S. after a surprise jump in figures this past week. Consumer credit levels for November also will be announced, with consensus forecasts for a significant increase largely driven by nonrevolving debt. Liquor giant Constellation Brands is expected by analysts to report more moderate sales expansion after five consecutive quarters of double-digit or better growth. The company is scheduled to report fiscal third-quarter results before the market open.
Friday, January 9: Chinese December trade data will be closely watched by investors, particularly in commodity markets, after November trade flows were much weaker than forecast with a sharp reduction in imports. November trade data and industrial output will be released in the U.K., Germany and France. Forecasts are for French production to rise modestly, which would be welcome news given how much the nation’s economy has lagged that of its neighbor and EU partner Germany in recent months. The biggest data point on deck in the U.S. on Friday will be the Department of Labor employment report for December. Economists’ consensus forecasts are for a moderation in payrolls after November’s jump and a reduction in the headline unemployment rate to 5.7 percent.
