Global financial markets appeared to regain some equilibrium last week as the Federal Reserve adopted a dovish tone. In coming weeks, leaders at the central banks of India and Australia will have the chance to be heard about the impact of weakened global demand on their economies. Earnings season continues for large-cap equities and financial results from drugmaker Merck & Co. will be critical for pharmaceutical sector investor sentiment. Regardless of the mood of investors, Super Bowl 50 will ensure that the week ahead will see massive amounts of sports wagers, both legal and illicit, in the U.S.
Monday, February 1: An earnings announcement by Julius Baer Gruppe for the final three months of 2015 will cap off a difficult year for the legendary Swiss private bank. After agreeing to a settlement with U.S. tax authorities for more than $500 million in December over charges that the Zurich-based banks aided U.S. citizens in dodging tax obligations, the firm revealed last week that it had fired an advisor in 2015 in connection to the ongoing investigations into corruption within soccers governing organization, FIFA.
Tuesday, February 2: The Reserve Bank of Indias monetary policy decision on Tuesday will be closely followed by investors after sharply declining inflation and sluggish international demand pave the way for a possible rate cut. With sustained low oil prices likely to keep inflation in check, Reserve Governor Raghuram Rajan is left with significant room to maneuver. Rajan raised eyebrows last week when he questioned the method used to calculate gross domestic product on the subcontinent.
Wednesday, February 3: Merck & Co. will announce results for the final quarter of 2015. Research and investment banking firm Leerink Swann lowered full-year earnings estimates for Merk to $3.67 per share in part over the impact of currency fluctuations. Despite macro headwinds, the company has recently received approval to bring a new product to market. Late last week the U.S. Food and Drug Administration approved the firms hepatitis C virus treatment, Zepatier.
Thursday, February 4: The initial January Caixin China Services Purchasing Manager Index release from Markit registered just slightly within positive territory. Investors will take note when final revised figures are released on Thursday, particularly after year-end GDP data released earlier this month revealed how critical the non-manufacturing sector is for sustaining growth.
Friday, February 5: The Federal Open Market Committee sent a dovish message to markets last Wednesday as concerns over declining oil prices and sluggish demand in China and Europe appear poised to alter the timing of rate hikes in coming months. The Department of Labor is scheduled to release the January employment report on Friday. Few analysts are expecting any shift that might alter the thinking of Fed policymakers.
Sunday, February 7: Super Bowl 50 is expected to generate more economic revenues than last years record-setting event, when a 30-second broadcast ad spot went for nearly $5 million as sponsors sought to engage the more than 110 million viewers. While legal sports gambling books in states with casinos will be seeing brisk business, some industry analysts estimate the scale of illegal wagering may exceed $4 billion.