The US midterm election is likely to dominate the news as American voters decide whether the Trump administration has done what it said it would do two years ago. At top of mind will be affordability.
Has Donald Trump been able to keep down prices for the man in the street? If so, then the Republican Party could maintain control of both Congress and the Senate. If not, then it could be an uncomfortable two years for the US president.
Elsewhere, the Reserve Bank of Australia will announce its latest interest-rate decision. At the last meeting, the central bank said that further tightening may be needed to prevent inflation from becoming embedded. Currently, with the inflation rate at 4.3%, the RBA is expected to hike rates by 0.25% to 4.85%.
The Bank of England is also expected to raise the cost of borrowing. At the last, meeting only three members voted for a rate hike. But with the inflation rate above the target rate of 2%, the UK central bank is expected to hike the base rate to 4.0%.
On the corporate front
It looks set to be a big week for earnings with some heavyweight Nasdaq companies hoping to steady the wobbly tech sector. Apple (Nasdaq: AAPL), which recently reclaimed the mantle as the world’s most-valuable company, is expected to report a modest rise in fourth-quarter earnings, on revenue that could improve around 10%. Close attention could be paid on iPhone sales and revenues from its service sector.
Advanced Micro Devices (Nasdaq: AMD) will need to pull out all the stops to quell concerns that growth for semiconductors might not match lofty market projections. Nevertheless, strong third-quarter revenue and earnings are on the cards, thanks to healthy demand from its data-centre segment.
There are also earnings from ARM Holdings (Nasdaq: ARM) and Qualcomm (Nasdaq: QCOM). Chip-designer ARM Holdings could say that earnings and revenue rose by as much as 20% in the second-quarter, as revenue from licensing grew. Qualcomm is more about the Internet of Things than AI. It is expected to register a 10% rise in fourth-quarter revenue.
Pfizer (NYSE: PFE), Amgen (Nasdaq: AMGN) and Moderna (Nasdaq: MRNA) will be flying the flag for the drug sector. Pharmaceuticals are no longer the talk of the town unless the companies are involved in GLP-1 drugs. None of the three companies are at the forefront of weight-loss medications. So, their earnings are likely to be pedestrian at best.
Over in the consumer sector, McDonald’s (NYSE: MCD), Yum Brands (NYSE: YUM) and Luckin Coffee (Nasdaq: LKNCY) are set to report quarterly results. Third-quarter revenue at the home of the Big Mac could be flat, though earnings might show signs of improving. Meanwhile, KFC owner Yum Brands could report lower earnings as rising costs eat into margins. Elsewhere, close attention will be paid to see if the breakneck growth at Luckin Coffee can continue.
DBS Group (SGX: D05), United Overseas Bank (SGXM U11) and Overseas-Chinese Bank (SGX: O39) will be in in focus in Singapore. The three banks have come off the boil as the market frets over net interest margins. But the evidence appears to show that many central banks are about to embark on a rate-hiking cycle.
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Apple and McDonald’s are part David Kuo’s Asian Consumer Portfolio. David Kuo also owns shares in DBS Group, UOB, OCBC and Qualcomm.
