The attention next week could focus on the likely economic impact of the rapidly-spreading Wuhan virus rather than corporate earnings. Some of the US companies that will report next week that could provide useful insights include Disney (NYSE: DIS), Yum China (NYSE: YUMC) and Wynn Resorts (NASDAQ: WYNN) ….
…. Disney has shut its theme parks in both Shanghai and Hong Kong until further notice; Yum China has temporarily closed some of its KFC and Pizza Hut stores in Wuhan; and a 75% drop in visitors to Macau could severely impact casino operator Wynn Resorts.
Staying with markets, the Shanghai stock market will re-open after the long Chinese New Year holidays. It will be the first opportunity that mainland investors will have to react to the worsening global health emergency.
US vs China
On the economic front, the US could report a widening of its balance of trade in December following three months of shrinkage. Elsewhere, American non-farm payroll could be little changed in January from the previous month.
China’s purchasing managers’ indices for January could show that both the manufacturing and services are still expanding. But they could be small comfort given the outbreak of the coronavirus. China will also report January inflation numbers, which is expected to show its faster rate of price increases since 2012.
The Reserve Bank of India will announce its latest interest-rate decision. The central bank unexpectedly held its benchmark repo rate at 5.15% in December after five consecutive rate cuts. It could leave the rate unchanged again this month.
The Bank of Thailand could keep its policy rate on hold too. Meanwhile, the Reserve Bank of Australia could stand pat on its cash rate at 0.75%.
And finally, the United Kingdom will be flying solo after it officially left the European Union. The latest purchasing-managers’ indices could show that the manufacturing and construction sectors contracted in January. House prices rose, though at a slower pace.
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Disclosure: David Kuo does not own shares in any of the companies mentioned.